TLDR
- Coinbase stock rose over 4% to hit all-time high of $389 despite H.C. Wainwright’s double downgrade from buy to sell
- Bitcoin’s rally to new record above $113,000 helped push COIN shares higher even as analysts warn of weak Q2 earnings
- Coinbase acquiring crypto-options exchange Deribit to strengthen derivatives market position globally
- Company expanding into emerging markets like Argentina and India while securing regulatory approvals in Europe and Asia
- Q2 2025 earnings scheduled for July 31, with analysts divided on stock’s valuation at current levels
Coinbase Global, Inc. (COIN) shares reached an all-time high of $389 on Thursday, climbing more than 4% even after H.C. Wainwright issued a rare double downgrade on the crypto exchange stock.
The investment firm cut its rating from buy directly to sell. Analyst Mike Colonnese cited concerns about slowing spot trading activity and what he called an “overdone” rally in the stock price.
“While we continue to view Coinbase as a ‘Best of Breed’ crypto exchange and remain positive on the sector, we believe valuation has outstripped near-term fundamentals,” Colonnese wrote in a client note.
The stock has surged approximately 150% since its April lows. This dramatic rise has pushed some analysts to question whether the gains can be sustained.
H.C. Wainwright expects a “meaningful decline” in spot trading volume on centralized exchanges during the second quarter. This could impact Coinbase’s transaction revenue, which represents the company’s largest income source.
Market Rally Overpowers Bearish Calls
Bitcoin’s continued strength helped lift Coinbase shares. The leading cryptocurrency rose another 2% to set a new record above $113,000 on Thursday.
Most Wall Street analysts maintain neutral or bullish ratings on Coinbase stock. Barclays recently raised its price target from $202 to $359, even while anticipating a weaker second quarter report.
Oppenheimer continues to rate the stock as outperform. The firm sees long-term growth potential despite near-term challenges.
Coinbase has delivered strong returns for investors this year. The stock shows a year-to-date gain of 52.58% and a one-year return of 72.55%.
These returns far exceed the S&P 500’s gains of 6.75% year-to-date and 11.45% over one year. The three-year return stands at an impressive 528.39%.
Strategic Acquisitions Fuel Growth Plans
Coinbase announced plans to acquire Deribit, the leading global crypto-options exchange by open interest and trading volume. This move aims to strengthen Coinbase’s position in the derivatives market.
The acquisition particularly targets growth outside the United States. It could expand Coinbase’s revenue base and international footprint.
The company is also launching new products including cbXRP and cbDOGE. These tokenized assets align with Coinbase’s goal to become the primary platform for enterprises integrating cryptocurrency.
Coinbase continues investing heavily in its Ethereum-based Layer 2 network called Base. The platform offers reduced fees and improved scalability for users.
The company launched a $5 million bug bounty program to enhance Base’s security. Privacy tools from the recent Iron Fish acquisition are being integrated into the platform.
Global expansion remains a key priority. Coinbase is entering emerging markets including Argentina and India.
The exchange has secured regulatory approvals in Spain, France, Singapore, and Bermuda. This international push helps reduce dependence on U.S. operations.
Valuation Concerns Persist Ahead of Earnings
Coinbase trades at a price-to-earnings ratio of 63.7, well above the industry average of 22. This elevated valuation has drawn scrutiny from some market observers.
GuruFocus assigns a one-year fair value estimate of $213.72 for the stock. This implies a potential 43% downside from current levels.
The average one-year price target from 28 analysts stands at $301.66. This suggests many see limited upside from Thursday’s closing price.
Second quarter 2025 earnings are scheduled for release on July 31 after market close. The company will hold an investor Q&A session following the announcement.
The Zacks Consensus Estimate for 2025 and 2026 earnings has moved higher recently. Estimates increased by 22.8% and 3.5% respectively over the past 30 days.
H.C. Wainwright expects subscription and services revenue to exceed expectations. This includes income from staking and custody services.
However, the firm anticipates transaction revenue will disappoint due to lower trading volumes. This could weigh on overall quarterly results.
Coinbase stock traded at $378.50 at midday on July 10, near its 52-week high of $382.00. The shares closed Thursday at their highest level ever recorded.
