In a notable shift in sentiment, H.C. Wainwright analyst Mike Colonnese has upgraded the stock rating of crypto exchange Coinbase (COIN) from Sell to Buy, now targeting a price of $425, a significant increase from the previous $300 estimate. This change reflects a newfound optimism driven by renewed momentum in the cryptocurrency market, heightened institutional interest, and potential advancements in U.S. regulatory frameworks.
This upgrade precedes Coinbase’s third-quarter earnings announcement, which has analysts projecting steady crypto prices and trading activity through the year’s end, bolstered by seasonal trends and improved market sentiment.
Coinbase’s recent earnings report revealed total revenue of $1.9 billion, exceeding Wall Street’s expectations of $1.8 billion. The company’s financial performance was supported by an uptick in trading volumes, a recovery in cryptocurrency prices, and robust activity in its subscription and services segment, which has been providing a more stable income stream beyond trading fees.
Despite these positive earnings, Coinbase shares saw a slight decline of 0.6% in early trading, settling at approximately $318.50. Investor caution may stem from recent stock price increases, though analysts suggest that the underlying fundamentals appear far more promising than they did a few months prior.
Wainwright’s analysts believe that progress in regulatory clarity could act as a significant catalyst for Coinbase’s future growth. They anticipate that market structure legislation, which aims to clarify the rules surrounding cryptocurrency, could be passed by the U.S. Senate before the end of the year, even in light of the ongoing government shutdown. Such developments could alleviate the uncertainty surrounding U.S. exchanges and potentially encourage greater institutional participation in the crypto market, as evidenced by the rising flows into exchange-traded funds (ETFs) and custody services.
Moreover, Coinbase’s acquisition of Deribit earlier this year is expected to diversify its operations and spur revenue growth going forward. The analysts have also adjusted their revenue forecast for 2025, raising it from $7.1 billion to $7.4 billion, along with an increase in the earnings estimate to $4.99 per share.
However, the report does not overlook the risks that remain on the horizon. Coinbase’s reliance on retail trading, the volatility inherent in cryptocurrency markets, and the unpredictability of regulations in a rapidly changing political landscape are all points of concern. Furthermore, competition remains intense, not just from emerging crypto exchanges but also from traditional financial institutions. Despite these challenges, H.C. Wainwright maintains that Coinbase’s status as the most established U.S. crypto platform offers a competitive edge once regulations become clearer.
Overall, Wall Street’s perspective on Coinbase remains largely favorable. Among 24 analysts monitored in the past three months, 15 have rated the stock as a Buy, eight recommend holding it, and just one has rated it as a Sell. This yields a “Moderate Buy” consensus, with the average 12-month price target for COIN currently set at $388.82, indicating a potential upside of 9.10% based on its present trading price.
