Coinbase (COIN) shares rose 12% on Friday despite the crypto exchange missing fourth-quarter earnings expectations, as analysts reacted to the report with a mix of caution about near-term pressures and optimism about the evolution of the company’s business model.
The company posted net income of $1.71 billion, missing Wall Street estimates of $1.81 billion, while its core operating profit (adjusted EBITDA) was $566 million, missing the consensus of around $653 million.
Coinbase reported a net loss of $667 million under generally accepted accounting principles (GAAP), primarily due to an unrealized loss of $718 million on its cryptocurrency investment portfolio and a loss of $395 million on strategic investments.
Barclays analyst Benjamin Budish called the fourth quarter “a failure across the board,” citing weak trading and subscription revenue along with higher-than-expected operating expenses. Budish lowered his price target to $149 from $258, writing that trading activity, interest income related to stablecoins, and cryptoasset prices still account for the majority of Coinbase’s performance.
Still, he acknowledged encouraging trends, including an increase in Coinbase’s share of the USDC market cap, a growing subscriber base for Coinbase One, and continued share buybacks, which reduced the share count by about 8% quarter over quarter.
Benchmark’s Mark Palmer echoed a more optimistic long-term view. While the headline results fell short, Palmer pointed to Coinbase’s growing derivatives business, expanding product set and adoption of stablecoins as signs the company is becoming more “diversified and durable.” He maintained a buy rating on the stock but cut his price target in half to $267 from $421.
Clear Street’s Owen Lau noted that Coinbase’s consumer monetization is under pressure, with the retail acquisition rate falling from 1.43% in the third quarter to 1.31% in the fourth quarter. That decline, driven by a shift toward advanced trading tools and the Coinbase One subscription model, reduced transaction revenue but was partially offset by increased engagement and cross-selling. It lowered its price target to $277 from $344, citing a prolonged cryptocurrency decline, weak retail participation and a more aggressive macroeconomic backdrop.
Despite the weak impression, Lau said Coinbase’s long-term positioning appears stronger. The company now has 12 business lines generating more than $100 million in annualized revenue, including two over $1 billion. Its base layer network, derivatives platform and growing stablecoin infrastructure show signs of broader utility beyond trading, he said.
JPMorgan also lowered its price target for COIN after the report, citing near-term earnings pressure.
Still, Coinbase reiterated its commitment to maintaining positive adjusted EBITDA across all market cycles, supported by $14.1 billion in total available resources. Management said it continues to buy back shares and accumulate bitcoins. using a portion of operating income.
