• Several brokerages cut their price targets on Coinbase (COIN) (COIN) following the company's Q3 earnings, with Mizuho (MFG) and Barclays (BCS) issuing the most bearish revisions.
  • The cuts reflect concerns over a 35% year-over-year revenue decline and reliance on investment gains for reported profit, despite growth in subscription and derivatives revenue.
  • Shares of Coinbase have faced pressure as analysts reassess the company's earnings outlook amid softer trading conditions.

Broad Downgrades in Price Targets

A wave of price-target cuts hit Coinbase Global (COIN) on Thursday, as analysts reacted to the cryptocurrency exchange's third-quarter results released October 29. Jefferies (JEF) lowered its target to $174 from $183, while Mizuho cut its target to $145 (prior target not provided). Barclays reduced its target to $120 from $149, Wells Fargo (WFC) to $174 from $200, Canaccord (CF.TO) to $275 from $300, Needham to $197 from $205, and Compass Point to $165 from $187, according to the headline. The reductions range from 4.9% to 19.5%, with Barclays and Wells Fargo among the steepest.

The cuts come after Coinbase reported Q3 revenue of approximately $1.22 billion, down roughly 35% year over year, though broadly flat sequentially. Net income of $718.7 million was largely driven by $715 million in gains on cryptocurrency investments, highlighting a distinction between operating performance and investment-driven profit. Adjusted net income was $77.7 million, and adjusted EBITDA was $332.9 million, up 60% sequentially but well below the $800.7 million reported a year earlier.

Revenue Pressures and Diversification Efforts

The revenue decline reflects weaker trading conditions, with industry crypto trading volume down about 10% sequentially. Coinbase's transaction revenue came in at approximately $590 million, roughly flat sequentially, while subscription and services revenue rose 3% to $570 million, representing about 49% of net revenue. The company is pushing to diversify beyond spot trading, with derivatives and prediction markets now accounting for around 25% of transaction revenue. Prediction markets alone exceeded a $200 million annualized revenue run rate, and average USDC held in Coinbase products reached $22 billion, up 49% year over year.

Despite these efforts, the price-target cuts suggest analysts remain cautious about the company's near-term earnings trajectory. The targets now range widely, from $120 to $275, indicating divergent views on Coinbase's ultimate value. It is not clear whether any of the firms also changed their stock ratings; the headline only reflects target changes. A FactSet (FDS) survey cited by Jefferies shows an average analyst target of $204.44 and an average "overweight" rating, but that broader sample differs from the seven firms listed.

Regulatory Headwinds and Cost Controls

Coinbase continues to face regulatory challenges. On October 7, Michigan announced that the company had agreed to stop offering new sports-related event contracts and close remaining positions by October 10 while appeals proceed. The dispute centers on whether federal derivatives oversight preempts state gambling laws, an industry-wide issue also affecting Robinhood (HOOD) and Kalshi. On the earnings call, CEO Brian Armstrong described an improving U.S. regulatory environment, citing the GENIUS Act and cooperation between the SEC and CFTC, but product-specific risks remain.

The company has also taken steps to cut costs. In May, Coinbase cut approximately 700 jobs, or 14% of its workforce, and reorganized around AI-enabled workflows. Management said Q3 benefited from a full quarter of the lower headcount. Restructuring charges were expected to be $50 million to $60 million, according to reports. For Q4, Coinbase guided subscription and services revenue to $550 million to $630 million, versus $570 million in Q3, and indicated that adjusted expenses could rise sequentially as it invests further in prediction markets.

What to Watch

Investors will be focused on whether Coinbase can offset soft trading activity with growth in subscriptions, stablecoins, and derivatives. The wide range of analyst targets underscores the uncertainty. Reported earnings may remain volatile due to changes in the value of crypto investment holdings, making revenue composition and adjusted metrics key to assessing the company's operating performance. Coinbase did not immediately respond to a request for comment on the price-target changes.

Clarification: An earlier version of this article misstated the percentage reduction for Jefferies; it is 4.9%, not 5.2%.