Benchmark cuts Coinbase target price by 37%… “Business model is more resilient”

U.S. brokerage Benchmark lowered its target price for Coinbase by 37%. However, it maintained its assessment that the company’s business model has become more diversified and more resilient than in the past.

According to The Block, a digital-asset (cryptocurrency) media outlet, on the 14th, Benchmark analyst Mark Palmer cut Coinbase’s target price to $267 from $421. The move reflects a deterioration in the recent digital-asset market environment. He kept his rating at “Buy.”

The new target implies about 60% upside from the current share price of around $164. Palmer also lowered his 2026 earnings-per-share (EPS) forecast by 21% to $5.34. In particular, his estimate for 1Q 2026 EPS was $0.96, about 19% below the market consensus of $1.18.

Coinbase’s 4Q 2025 net revenue came in at $1.71 billion, down 5% quarter on quarter. The figure was within the company’s guidance range but missed Wall Street estimates of $1.81 billion. Over the same period, as the total digital-asset market capitalization fell 11%, transaction revenue declined 6% to $983 million.

The company swung to a GAAP net loss of $667 million. The result reflected $718 million in unrealized losses on its digital-asset portfolio and $395 million in strategic investment losses.

Palmer highlighted changes in the company’s business mix despite the weak results. “There’s more beneath the headlines,” he said, adding that “Coinbase’s business is more diversified and more durable than ever.”

Institutional transaction revenue rose 37% quarter on quarter to $185 million. The increase was largely driven by the first full-quarter impact of the derivatives exchange Deribit, acquired last August for $2.9 billion. CEO Brian Armstrong said, “Derivatives will be a key growth driver in 2026 and beyond.”

Stablecoin revenue increased 3% to $364 million. Average USDC balances hit a record high. Armstrong said, “Stablecoins represent a structural shift in global payments,” adding that “AI agent payments are a rapidly growing use case.”

The shift in the revenue mix was also notable. Subscription and services revenue in the fourth quarter was $727.4 million, accounting for about 43% of total net revenue. Full-year 2025 subscription and services revenue rose 23% year on year to $2.8 billion. The company said it now has 12 products generating more than $100 million in annual revenue, and that paid subscription service “Coinbase One” subscribers are nearing 1 million.

Palmer said that while Coinbase shares “trade like leveraged crypto beta in the near term,” the company is “evolving into an ‘everything exchange’ over the long term.” Coinbase introduced trading in about 10,000 stocks and launched a prediction market in partnership with Kalshi. Even during the recent pullback, product trading volume hit a record high.

Other brokerages offered mixed views. Bernstein set a $440 target and said the current share price is “too undervalued to sell.” Canaccord also lowered its target to $300 but kept a Buy rating. Piper Sandler, meanwhile, cut its target to $150 and maintained a “Neutral” rating.

Coinbase guided 1Q 2026 subscription and services revenue at $550 million to $630 million. It expects costs to remain broadly in line with the prior quarter. Cumulative transaction revenue through Feb. 10 was about $420 million.

The company held $11.3 billion in cash as of the end of last year. It repurchased $1.7 billion of shares in 4Q and through early this month, and authorized an additional $2.0 billion buyback.

Meanwhile, Coinbase shares surged about 18% on the 14th, reclaiming the $164 level. Benchmark’s $267 target implies about 60% upside from the current price.