Compass Point lowers target and holds Sell
Compass Point downgraded its price target on Coinbase Global Inc. (NASDAQ: COIN) to $140 from $190 while keeping a Sell rating. At the stock's current level of $165.94, Compass Point's revised target translates to approximately 16% downside versus the share price cited. The firm pointed to a decline in both spot and derivatives trading volumes since Coinbase released its fourth-quarter results as a primary reason for the adjustment.
Volume trends and forecast skepticism
The analyst team signaled concern that first-quarter and 2026 forecasts remain too optimistic in light of recent volume weakness. This assessment aligns with broader downward revisions among sell-side analysts: InvestingPro Tips show seven analysts have trimmed earnings estimates for the upcoming period. Compass Point emphasized that retail indifference - a hallmark of prior crypto winter phases - appears to be a defining feature of the current environment, and the firm expects trading activity to decelerate back toward pre-Trump period levels.
Market performance and competitive dynamics
Coinbase shares have suffered notable losses, sliding 45% over the past six months and down 27% year-to-date. Compass Point highlighted a materially different competitive landscape than in the last cycle. Where competition once exited U.S. markets amid a hostile regulatory backdrop, more accommodative regulations now appear to be drawing established fintechs and electronic brokerage firms into the space. The firm expects that increased competition will contribute to softer crypto activity.
Company results and analyst reactions
In its fourth quarter, Coinbase reported revenue of $1.8 billion, a 20% decline versus the prior period, though the figure beat analyst expectations. The company recorded a net loss of $667 million, which Compass Point and other observers attribute to unrealized markdowns on its cryptocurrency holdings and investments. Reported earnings per share were $0.66, missing the consensus forecast of $1.05, and revenue fell short of the anticipated $1.85 billion. Those misses represented a negative surprise for investors and pressured the stock after the announcement.
Analysts have varied in their subsequent responses. Piper Sandler cut its price target to $150 from $270 and maintained a Neutral rating. Needham lowered its target to $230 from $290 while keeping a Buy rating. H.C. Wainwright reiterated a Buy rating and retained a $350 price target, while acknowledging the quarter was weaker than expected.
Outlook considerations
Compass Point reiterated its Sell rating on the cryptocurrency exchange operator and expects continued headwinds from diminishing trading volumes and rising competition. The combination of retail apathy, volume contraction, and new market entrants forms the basis for the firm's cautious stance.
Summary of key facts
- Compass Point cut Coinbase price target to $140 from $190 and reaffirmed a Sell rating.
- New target implies roughly 16% downside from the $165.94 share price referenced.
- Firm cited declining spot and derivatives volumes since Q4 results and viewed Q1 and 2026 forecasts as too optimistic.
- Coinbase reported Q4 revenue of $1.8 billion, down 20%, and a net loss of $667 million; EPS was $0.66 versus $1.05 expected.
- Several other analysts revised targets or views: Piper Sandler to $150 (Neutral), Needham to $230 (Buy), and H.C. Wainwright stayed at $350 (Buy).