Coinbase Shares Rally Despite Analysts Slashing Price Targets
By John Nada·Feb 14, 2026·7 min read
Coinbase shares rose 12% despite analysts cutting price targets after a Q4 earnings miss. Analysts cite weak retail trading and macro challenges while noting long-term potential.
Shares of Coinbase (COIN) surged 12% on Friday, even as multiple Wall Street analysts cut their price targets following a disappointing fourth-quarter earnings report. Analysts from Barclays, Benchmark, Clear Street, and JPMorgan attributed the target reductions to weak retail trading and macroeconomic challenges, signaling a cautious sentiment in the market.
In its earnings report, Coinbase posted net revenue of $1.71 billion, falling short of Wall Street's expectations of $1.81 billion. The company's adjusted EBITDA came in at $566 million, missing the consensus estimate of approximately $653 million. Additionally, Coinbase reported a net loss of $667 million under generally accepted accounting principles (GAAP), largely due to a $718 million unrealized loss on its crypto investment portfolio and a $395 million loss on strategic investments.
Barclays analyst Benjamin Budish described the quarter as a “miss across the board,” highlighting weak transaction and subscription revenues alongside higher-than-expected operating expenses. This underperformance is indicative of the broader challenges facing the cryptocurrency sector, where fluctuating prices and regulatory uncertainties continue to impact trading volumes. Despite this, Budish noted some encouraging trends such as an increase in Coinbase's share of the USDC market cap and a growing subscriber base for its Coinbase One service. He also pointed out that active share buybacks reduced the overall share count by about 8% quarter-over-quarter, which could bolster earnings per share in the future.
Benchmark’s Mark Palmer maintained a more optimistic long-term view, suggesting that while the headline results were disappointing, Coinbase's expanding derivatives business and growing product suite indicated a shift toward a more diversified and resilient model. This diversification is crucial for Coinbase as it seeks to navigate the increasingly competitive cryptocurrency exchange landscape. By branching out into derivatives and other products, the company can create additional revenue streams that may help mitigate the impact of declining retail trading volumes. Palmer reduced his price target to $267 from $421 but retained a buy rating for the stock, reflecting a belief that the company's long-term growth potential remains intact despite short-term setbacks.
Clear Street’s Owen Lau pointed out that Coinbase's consumer monetization is facing pressure, as evidenced by a decline in the retail take rate from 1.43% in Q3 to 1.31% in Q4. This dip was attributed to a shift towards advanced trading tools and the Coinbase One subscription model, which lowered per-trade revenue. However, Lau remarked that Coinbase's long-term positioning remains strong, given that it now has 12 business lines generating over $100 million in annualized revenue, with two exceeding $1 billion. The broadening of its business lines suggests that Coinbase is not solely reliant on transaction fees, which have historically been volatile and closely tied to market conditions.
JPMorgan also lowered its price target on COIN after the earnings report, citing ongoing pressure on near-term earnings. Yet, Coinbase's management reaffirmed its commitment to maintaining adjusted EBITDA positivity across market cycles, supported by robust total available resources of $14.1 billion. This significant financial cushion provides the company with the flexibility to invest in growth initiatives and weather market downturns. Furthermore, the company continues to buy back shares and accumulate Bitcoin using a portion of its operating income, strategies that signal confidence in its long-term prospects and commitment to returning value to shareholders.
Coinbase's mixed earnings results reflect a broader trend in the crypto market, where institutions are adapting to changing dynamics. The company's ability to maintain a positive outlook despite immediate challenges indicates a resilience that could appeal to long-term investors, especially as it diversifies its offerings and enhances its infrastructure. The underlying strength of its business model, which now includes various revenue-generating segments, positions Coinbase favorably compared to competitors who may not have similar diversification strategies.
As Coinbase navigates a difficult market environment, its focus on expanding revenue streams through derivatives and subscription services may set a precedent for other crypto exchanges. Analysts' responses underscore a critical balancing act between current performance and future potential, which could have implications for overall market sentiment surrounding crypto equities moving forward. The ongoing evolution of Coinbase’s services reflects broader trends in the cryptocurrency industry, where exchanges are increasingly looking to offer more than just basic trading capabilities.
The current state of the crypto market is characterized by volatility and regulatory scrutiny, factors that have led to fluctuating trading volumes and investor sentiment. As such, Coinbase's strategic pivot towards a more diversified revenue model may serve as a blueprint for other players in the industry. The success of the Coinbase One subscription model, which aims to enhance user engagement, showcases the potential for subscription-based services in a market traditionally dominated by transaction-based revenue.
Furthermore, the increase in Coinbase's share of the USDC market cap is particularly noteworthy as it underscores the growing importance of stablecoins in the cryptocurrency ecosystem. As stablecoins gain traction among users seeking to mitigate volatility, Coinbase's positioning in this segment could enhance its competitive edge. The company’s investments in building a robust infrastructure around stablecoin transactions could attract a wider range of users, from retail investors to institutional players seeking reliable trading options.
It is also essential to consider the broader macroeconomic environment influencing Coinbase's performance. With rising interest rates and inflationary pressures impacting consumer spending, the overall appetite for riskier assets such as cryptocurrencies may be tempered. Analysts have noted that the economic backdrop can significantly influence retail trading activity, and as such, the company may need to adjust its strategies to account for these external factors. Ongoing macroeconomic challenges could continue to pose hurdles for Coinbase in the near term, but its proactive measures, such as share buybacks and strategic investments, may help stabilize its performance.
In the face of these challenges, Coinbase's management remains committed to transparency and communication with its stakeholders. By providing regular updates on its financial health and strategic initiatives, the company fosters trust among investors and reinforces its long-term vision. This approach may be particularly valuable during periods of market uncertainty when investor confidence is paramount.
Analysts’ mixed reactions to Coinbase's earnings report highlight a broader sentiment within the cryptocurrency market, where optimism about long-term growth coexists with caution regarding immediate performance. As the landscape continues to evolve, Coinbase’s ability to adapt and innovate will be crucial in maintaining its position as a leading player in the industry. The company’s commitment to enhancing its product offerings and exploring new revenue avenues will likely resonate with investors looking for growth potential amidst volatility.
As Coinbase continues to refine its business model, the implications for the wider crypto market could be significant. Other exchanges may look to Coinbase as a case study in how diversification and innovation can help navigate turbulent market conditions. The focus on subscription services and advanced trading tools represents a shift in how exchanges can position themselves to meet the needs of a changing user base, which is increasingly seeking more sophisticated trading options.
The journey ahead for Coinbase will undoubtedly come with its set of challenges, but its strategic initiatives, financial resilience, and commitment to innovation could set it apart in a crowded marketplace. As analysts adjust their price targets and reflect on the company's performance, it is clear that the narrative around Coinbase is far from settled. The ongoing dialogue between short-term pressures and long-term potential will continue to shape the market's perception of the company and its role within the evolving cryptocurrency ecosystem.