Wall Street Divided on Coinbase’s (COIN) Path Forward After Q3 Earnings Beat

Coinbase’s (COIN) expectations-busting third-quarter earnings report drew a range of responses from Wall Street analysts, highlighting sharp differences in expectations for the crypto exchange’s long-term growth and ability to manage costs.

The company posted $1.05 billion in transaction revenue and $801 million in adjusted Ebitda, both ahead of consensus estimates. Analysts across the board agreed that derivatives trading, subscription services and the integration of Deribit helped drive the beat. From there, opinions diverged.

Barclays analyst Benjamin Budish acknowledged Coinbase’s performance, but flagged rising costs and shrinking margins heading into the fourth quarter. He cited a step-up in operating expenses, driven by hiring and acquisitions like fundraising platform Echo, as key challenges. Budish lowered his price target to $357 from $361, citing lower earnings estimates for 2026.

Clear Street’s Owen Lau was more upbeat. He raised his target to $415 from $405, arguing that Coinbase is well-positioned to benefit from a growing role in cross-border B2B payments. Lau pointed to Coinbase’s partnerships with Citi and Shopify, and said stablecoin-based merchant payments could take market share from traditional pathways. He also flagged regulatory progress, such as the possible passage of the Clarity Act in the U.S. next year, as a potential “Altcoin Summer” catalyst.

Benchmark’s Mark Palmer echoed the optimism, keeping a buy rating and $421 target. He framed the earnings as a return to form, with Coinbase demonstrating operating leverage as crypto markets warmed. He emphasized the importance of subscription revenue, which grew 14% quarter-over-quarter, and the company’s role in the broader institutional adoption of digital assets.

Citi also struck an upbeat tone, highlighting momentum across the exchange’s expanding business lines.

Analysts led by Peter Christiansen said they were encouraged by the company’s progress in signing new “onchain-as-a-service” partnerships, including with Samsung and several banks. The report added that the company’s “Everything Exchange” vision is starting to take shape, with options trading now live and futures volumes set to rise.

Pending digital asset reforms could improve market access, and the bank noted they might also unleash “a pent-up innovation wave”. The analysts reaffirmed their buy rating on the stock and their $505 price target.

Compass Point’s Ed Engel, however, warned that cost growth outpacing revenue puts Coinbase in a vulnerable position should crypto markets cool. He slashed his 2026 Ebitda estimate and lowered his target to $266 from $277. Engel was skeptical that growth in stablecoin and staking revenues would continue, especially if interest rates fall and retail crypto enthusiasm wanes.

Broker Bernstein noted that the results were below their street-high expectations, but said the company is on the “path of a generational business buildout and its fate is not just simply driven by crypto price action.”

The rollout of the Base app to millions of users, alongside the launch of a Base token, could mark a “Crypto Venmo” moment for Coinbase, the report said, signaling a major step toward mainstream adoption. The broker reiterated its outperform rating on the shares and $510 price objective.

The biggest point of agreement was Coinbase’s expanding presence in derivatives and stablecoin-related products. But even that came with caveats as analysts noted declining commission rates and increasing competition from Circle Internet (CRCL), which is trying to pull more volume of its USDC stablecoin onto its own platform.

Ultimately, Coinbase’s near-term success is clear. But as crypto markets remain volatile and the company spends heavily on growth, the long-term outlook hinges on whether new revenue streams like B2B payments and tokenized assets can scale fast enough to justify the investment.

Price targets now range from $266 to $510, a gap that reflects both the opportunity Coinbase is chasing and the risks if it stumbles.