Wall Street Sticking With Coinbase Despite Three Earnings Misses

Coinbase recently posted a net loss of $359.5 million for the quarter ending June 30, missing analyst expectations by a wide margin. Revenue also fell to $1.22 billion as low market volatility caused trading volumes to drop significantly. This marks the third quarter in a row that the major crypto exchange has missed earnings estimates.

Despite the poor financial results, most major financial firms kept their buy ratings intact. Benchmark, Needham, Rosenblatt, and Baird all lowered their 12 month price targets for the stock, but they chose to view the slump as a temporary setback rather than a permanent problem. Only Barclays took a firmly bearish stance with a sell rating and a $95 target, while bullish firms like Bernstein and Citizens maintained much higher price targets near $330.

Optimistic analysts are looking past weak trading fees and focusing on new revenue streams. Coinbase is expanding into perpetual futures and traditional stocks while growing its subscription services and prediction markets. However, delays in rolling out new stablecoin features mean the company still faces hurdles as it tries to transform into an all in one financial platform.

Traders should watch for future trading volume shifts and stablecoin adoption rates to see if these new business lines can offset ongoing fee revenue drops. COIN shares recently traded around $151.24, leaving a large gap between the current price and the average analyst target.