Benchmark cuts Coinbase price target by 37% but says business is ‘more diversified and durable’ than ever

Benchmark analyst Mark Palmer cut his Coinbase price target by more than a third on Friday, lowering it to $267 from $421, even as he reiterated a buy rating. The move came a day after Coinbase reported fourth-quarter results that missed on both revenue and earnings amid a broader crypto pullback.

Palmer’s revised target implies roughly 60% upside from COIN’s current price around $164. His new FY26 EPS estimate of $5.34 sits about 6% below consensus, with the widest gap in the first half: his Q1 2026 estimate of $0.96 is nearly 19% below the Street’s $1.18.

Coinbase’s 4Q25 net revenue of $1.71 billion declined 5% sequentially, in line with management’s guidance but below the $1.81 billion Wall Street expected. Transaction revenue fell 6% to $983 million as total crypto market cap dropped 11% during the period. On a GAAP basis, the company swung to a $667 million net loss, driven by a $718 million unrealized loss on its crypto portfolio and $395 million in strategic investment losses.

Palmer argued the headline misses obscure what’s happening underneath. Institutional transaction revenue jumped 37% sequentially to $185 million, fueled by the first full quarter of contributions from Deribit, the crypto options exchange Coinbase acquired for $2.9 billion last August. CEO Brian Armstrong pointed to derivatives as a major growth driver heading into 2026 and beyond.

Stablecoin revenue rose 3% to $364 million despite declining interest rates and crypto prices, with average USDC balances hitting an all-time high. Armstrong called stablecoins a structural transformation in global payments and flagged AI agent payments as a rapidly accelerating use case.

The shift in Coinbase’s revenue mix stood out. Subscription and services revenue of $727.4 million made up roughly 43% of net revenue in Q4. Full-year 2025 subscription and services revenue hit $2.8 billion, up 23% year-over-year and 5.5 times the 2021 cycle peak. The company now claims 12 products generating over $100 million in annualized revenue, with paid Coinbase One subscribers approaching 1 million.

Palmer framed the core tension in the COIN thesis as the gap between the stock’s short-term behavior as leveraged crypto beta and its longer-term trajectory toward what the company calls its “Everything Exchange.” Coinbase has begun rolling out equities trading with nearly 10,000 stock tickers, launched prediction markets initially powered by Kalshi, and posted record commodities volumes during the recent pullback.

He is not alone in staying bullish through the downturn. Bernstein on the same day reiterated an outperform rating with a $440 target, arguing the stock is “too cheap to sell” at roughly 11 times EV to 2025 earnings. Canaccord cut its target to $300 from $400 but kept a buy. Piper Sandler took a more cautious stance, slashing its target to $150 from $270 with a neutral rating.

Management guided to 1Q26 subscription and services revenue between $550 million and $630 million and said expenses would remain flat. Transaction revenue through Feb. 10 totaled approximately $420 million. Coinbase ended 2025 with $11.3 billion in cash and repurchased $1.7 billion in stock during Q4 and early February, fully offsetting 2025 dilution from stock-based compensation. The board authorized an additional $2 billion in buybacks.

Shares of COIN surged nearly 18% on Friday to around $164, recovering much of the prior session’s decline, according to The Block’s Coinbase Price page. Benchmark’s $267 target implies roughly 60% upside from current levels.

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