Barclays Turns Bearish On Coinbase Following Q1 Woes, Slashing Price Target To $107

Coinbase (COIN) opened the quarter with a rough financial showing. After the exchange reported major losses in its first-quarter earnings, Barclays responded by cutting its price target for COIN, while Bank of America trimmed its target more modestly. 

Barclays lowered its Coinbase price target to $107 from $140, maintaining an Underweight rating following the company’s release. Bank of America, by comparison, reduced its target to $218 from $234 while keeping a Buy rating. 

Barclays anchored its downgrade on what it said was a significant miss across both revenue and adjusted EBITDA. It noted that even though certain segments of Coinbase’s activity came in above expectations, overall quarter-to-date transaction revenues still fell well below Street estimates. 

The message from Barclays was that the upside in specific trading pockets wasn’t enough to offset the broader weakness in Coinbase’s core performance.

Bank of America’s reasoning focused more on the pressure on expenses, as well as the demand environment Coinbase is facing. The firm flagged higher tech and development spending and said that consumer volumes declined 36% quarter over quarter, a drop it linked to depressed asset prices. 

Despite that, Bank of America stayed positive, pointing to the company’s strategic push toward crypto-as-a-service and arguing that those efforts could create more durable revenue streams over time. 

The financial results themselves showed the seriousness of the quarter. Coinbase reported a net loss of $394.1 million, or $1.49 per share, compared with a profit of $65.6 million, or $0.24 per share, in the year-ago period. 

It also showed softness beyond pure trading activity: revenue from the subscription and services unit—which includes businesses outside of trading—fell 13.5% to $583.5 million in the first quarter. 

Overall adjusted EBITDA dropped to $303.3 million from $929.9 million a year earlier, underscoring how steep the earnings decline was compared with the prior-year baseline.

Trading-related revenue also weakened. Coinbase said transaction revenue fell 40% year over year to $755.8 million. In addition, it recorded a loss on crypto assets held for investment, reporting a loss of $482.4 million on those crypto assets versus a loss of $596.7 million in the prior year.

Following the release of its Q1 report, Coinbase’s stock, COIN, saw a 5% drop to $192 per share. However, the stock closed this week’s trading session at $201, marking an 8% surge in the last 24 hours. 

Featured image from OpenArt, chart from TradingView.com