Coinbase (COIN) surpassed Wall Street expectations with its third-quarter earnings, sparking mixed reactions from analysts over the crypto exchange’s future growth potential and cost management challenges.
The company reported transaction revenue of $1.05 billion and an adjusted EBITDA of $801 million, both figures exceeding consensus forecasts. Market watchers broadly attributed this strong performance to Coinbase’s increased activity in derivatives trading, expanded subscription services, and the acquisition and integration of the Deribit platform.
However, analysts offered diverging perspectives beyond these results. Barclays’ Benjamin Budish acknowledged Coinbase’s solid showing but expressed caution regarding rising operating expenses and narrowing margins as the company heads into the fourth quarter. He pointed to significant cost growth tied to hiring and acquisitions, including the fundraising platform Echo. Reflecting his concerns, Budish lowered his price target slightly from $361 to $357 and revised down his earnings projections for 2026.
On the more optimistic side, Clear Street’s Owen Lau raised his price target from $405 to $415, emphasizing Coinbase’s advantageous positioning in cross-border business-to-business payments. Lau highlighted strategic partnerships with Citi and Shopify, noting that stablecoin-based merchant payments could increasingly compete with conventional payment methods. He also cited potential regulatory advancements, such as the anticipated passage of the Clarity Act in the U.S. next year, as a possible catalyst for broader market growth.
Benchmark’s Mark Palmer also maintained a positive stance, reiterating a buy rating with a $421 target. Palmer characterized the earnings report as a return to form, evidencing Coinbase’s operating leverage amid recovering crypto markets. He underscored the 14% quarter-over-quarter growth in subscription revenue and Coinbase’s expanding role in institutional digital asset adoption.
Citi analysts, led by Peter Christiansen, echoed this upbeat sentiment. They praised Coinbase’s progress in securing new “onchain-as-a-service” deals with notable partners like Samsung and several banking institutions. Their report described the company’s vision of an “Everything Exchange” as beginning to materialize, highlighted by live options trading and anticipated increases in futures volumes. They further noted that pending digital asset regulatory reforms could enhance market access and potentially drive a wave of innovation. The group reaffirmed their buy rating and raised their price target to $505.
Conversely, Compass Point’s Ed Engel sounded a warning on rising costs outpacing revenue growth, which could make Coinbase vulnerable if crypto market conditions weaken. Engel cut his 2026 EBITDA estimates and lowered his price target from $277 to $266, expressing doubts about sustained growth in stablecoin and staking revenues if interest rates decline and retail interest in crypto diminishes.
Bernstein provided a tempered view, acknowledging that Coinbase’s results fell short of their high expectations but emphasizing the company’s broader strategic progress. Bernstein highlighted the rollout of the Base app to millions of users and the launch of a Base token as potential milestones in driving mainstream adoption, dubbing the initiative a “Crypto Venmo” moment. The broker maintained an outperform rating with a $510 price target.
The one area that analysts consistently noted was Coinbase’s expanding footprint in derivatives and stablecoin products, although they also flagged challenges such as decreasing commission rates and competitive pressures from Circle Internet (CRCL), which is seeking to increase volume on its USDC stablecoin platform.
In summary, Coinbase’s short-term results impressed the market, but long-term investor optimism remains divided. The company’s ability to scale emerging revenue streams like B2B payments and tokenized asset offerings will likely determine whether heavy investments translate into sustained growth amid ongoing market volatility.
