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

Coinbase’s ( COIN ) third-quarter earnings report that blew away expectations drew a range of responses from Wall Street analysts, highlighting stark 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 agree that derivatives trading, subscription services and Deribit’s integration will help drive the pace. From there, opinions diverge.

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

Clear Street’s Owen Lau was more optimistic. He raised his target to $415 from $405, arguing that Coinbase is well positioned to take advantage of 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 away from traditional routes. He also pointed to regulatory progress, such as the possible passage of the Clarity Act in the United States next year, as a potential “Altcoin Summer” catalyst.

Mark Palmer of Benchmark echoed the optimism, maintaining a buy rating and a target of $421. He framed the gains as a return to form, with Coinbase showing operating leverage as crypto markets heated up. 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 through 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 trading options now live and futures volumes poised to grow.

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

Compass Point’s Ed Engel, however, warned that cost growth outstripping revenue would put Coinbase in a vulnerable position should crypto markets cool off. He reduced his 2026 Ebitda estimate and lowered his target to $266 from $277. Engel was skeptical that the growth of stablecoin and staking revenues will continue, especially if interest rates fall and the enthusiasm for selling crypto diminishes.

Broker Bernstein noted that the results were below his street expectations, but said that the company is on “the path of a generational business buildout and its destiny is not only driven by the 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 stock and a $510 price objective.

The biggest point of agreement was Coinbase’s expanding presence in derivatives and stablecoin products. But even this came with caveats as analysts noted a decrease in commission rates and increased competition from Circle Internet (CRCL), which is trying to pull more volumes of its stablecoin USDC on its own platform.

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

The price targets now range from $266 to $510, a gap that reflects the opportunities that Coinbase pursues and the risks if it stumbles.