Morgan Stanley has raised its Coinbase stock price target from $250 to $258 ahead of earnings while retaining an Equal Weight rating, placing its forecast 50% above the shares’ previous $172 close.
Summary
- Morgan Stanley increased its Coinbase target by $8 without changing its Equal Weight recommendation.
- Citizens JMP lowered its target to $280 from $325 but retained a Market Outperform rating.
- Coinbase reported second-quarter revenue of $1.22 billion, down 18.5% from a year earlier.
- The company has expanded derivatives and stock products while facing state challenges over prediction markets.
Morgan Stanley kept its existing recommendation as part of an earnings preview covering brokers, exchanges and capital markets infrastructure companies, The Fly reported on Oct. 9. The revised target represents a 3.2% increase from its earlier forecast.
The bank had started covering Coinbase on Sep. 10 with a $250 target and an Equal Weight rating, according to MarketBeat. Its latest update raises the expected share value while leaving the investment recommendation unchanged.
Coinbase targets move in opposite directions before earnings
On the same day, Citizens JMP reduced its Coinbase target by $45 to $280, retaining a Market Outperform rating. Against the reported $172 share price, its revised forecast implies approximately 62.8% upside, according to MarketBeat.
Citizens linked the reduction to the execution still required for Coinbase’s expansion beyond cryptocurrency trading, Investing.com reported. The firm noted that more than 40% of the company’s revenue already comes from activities outside crypto trading.
Despite the cut, Citizens’ forecast remains $22 above Morgan Stanley’s new target. The two firms also maintained different recommendations, with Citizens retaining its outperform stance and Morgan Stanley keeping Equal Weight.
Other recent calls show a range of expectations. In its Oct. 9 analyst roundup, MarketBeat reported that Goldman Sachs had reiterated a Buy rating with a $244 target that week, while Cantor Fitzgerald maintained Overweight and a $212 target on Aug. 31.
Across its tracked analysts, the same publication listed 20 Buy ratings, 13 Hold ratings and three Sell ratings. Its aggregate classification was Hold, with an average price target of $224.29.
Coinbase’s revenue miss puts trading and services in focus
In its July 30 results, Coinbase reported revenue of $1.22 billion, an 18.5% decline from the same quarter a year earlier. MarketBeat’s earnings data placed the analyst revenue estimate at $1.29 billion and reported a per-share loss of $1.36 against an expected loss of $0.44.
As crypto.news previously reported, Coinbase’s second-quarter revenue miss accompanied a $359.5 million net loss. The earnings coverage also recorded $599 million in transaction revenue and $452 million from consumer trading, with consumer revenue falling 30.5% year over year.
Within subscription and services, the same report placed revenue at $555 million, including $292 million from stablecoins. Subscription and services accounted for 48% of net revenue, while average USDC balances held on Coinbase products reached $20 billion.
Coinbase’s own earnings release reported a record 10.3% share of crypto trading volume, compared with 9.1% in the first quarter. The company described the result as its third consecutive quarterly market-share gain despite weaker market conditions.
Alongside the net loss, Coinbase disclosed adjusted EBITDA of $207.8 million and its 14th consecutive quarter of positive adjusted EBITDA. Its financial reconciliation included adjustments for stock-based compensation, investment-related crypto losses and restructuring expenses, among other items.
Discussing the quarter, chief financial officer Alesia Haas said:
“The Everything Exchange is delivering real revenue, not just green shoots, and starting to yield tangible diversification.”
In the same statement, Haas said expenses came in below the midpoint of guidance for every major expense category.
Stock and derivatives filings extend Coinbase’s US plans
Beyond its existing crypto exchange, Coinbase has expanded access to equities, derivatives and event contracts. July 24 coverage of its multi-asset platform expansion described commission-free stock and ETF trading for eligible US customers, available 24 hours a day on five weekdays, according to a company announcement.
The report also detailed the replacement or reassignment of four senior leaders after Coinbase cut 14% of its workforce. Under the leadership changes, Jesse Pollak would focus on Base’s underlying blockchain, including trading, payments and tokenization.
On Sep. 3, Coinbase announced work to bring single-stock perpetual contracts to American customers through two US security futures filings. Documents dated Sep. 1 showed Coinbase Derivatives filing Form 1-N and Coinbase Financial Markets submitting Form BD-N.
According to the SEC rules described in that coverage, the exchange notice covers registration for security futures trading, while the brokerage notice covers a limited-purpose security futures broker-dealer. Coinbase said it would work with both the SEC and CFTC on the planned products.
The CFTC classifies futures on individual securities and narrow-based stock indexes as security futures products, placing them under joint SEC and CFTC oversight. Coinbase’s announcement did not confirm a US launch date or final contract specifications.
Michigan court denies protection for sports contracts
For its prediction-market business, Coinbase has argued that federally regulated event contracts fall under the CFTC’s exclusive authority. The company sued Michigan Attorney General Dana Nessel over access to sports contracts supplied through Kalshi.
In an Aug. 6 decision, US District Judge Shalina Kumar denied preliminary relief, refusing to block Michigan officials from enforcing state sports betting laws against the contracts.
According to the court coverage published Aug. 7, Kumar found that Coinbase had not demonstrated a likelihood of success on its federal preemption argument. The judge also rejected its claim that complying with federal derivatives rules and Michigan’s sports betting law would be impossible.
The order addressed Coinbase’s request for an injunction rather than issuing a final judgment on the underlying lawsuit, leaving the company without the preliminary protection it had sought against state enforcement.
