TLDR
- BofA upgraded Coinbase to Buy rating with $340 target following 40% stock decline since July
- The firm cites expanding market reach and faster product velocity as upgrade catalysts
- Third quarter revenue increased 55% to $1.9 billion with EBITDA up 78.3% to $801 million
- Platform now offers stock trading, ETF trading, and prediction markets beyond crypto
- Consensus price targets suggest 55% upside with 65% of analysts recommending Buy
Bank of America upgraded Coinbase Global Inc. to Buy this month. The January 8 call set a $340 price target on shares.
This upgrade follows a 40% drop from July highs. BofA analysts attributed the selloff to crypto market weakness.
The firm found no company-specific problems driving the decline. Business fundamentals remain intact according to their analysis.
BofA highlighted two key growth drivers. The addressable market continues expanding for crypto services.
Product launches have accelerated under current management. New features are rolling out faster than before.
The platform recently launched stock and ETF trading. Prediction markets also joined the product lineup.
These additions move Coinbase beyond pure crypto trading. Management calls this the “everything exchange” strategy.
Current users can now access more financial products. This creates opportunities to increase revenue per customer.
Divided Street Opinion
Barclays published a different view around the same time. That firm kept its Equal Weight rating intact.
The price target fell from $291 to $258. Their Q4 model includes multiple concerning factors.
Trading volumes may decline from recent levels. USDC stablecoin balances could grow more slowly.
Continued crypto volatility poses ongoing risks. These headwinds might affect upcoming quarterly results.
February brings the Q4 earnings report. That release will be closely watched by investors.
Financial Performance Holds Up
Recent quarterly results showed impressive growth. Q3 revenue climbed 55% year-over-year to $1.9 billion.
Adjusted EBITDA jumped 78.3% to $801 million. The revenue structure is shifting favorably.
Subscription and service revenue now represents 40% of the total. Trading fees make up a smaller portion than before.
This change creates more stable earnings patterns. Revenue becomes less dependent on crypto price swings.
Platform assets totaled $516 billion at quarter end. Institutional clients contributed heavily to this figure.
Stablecoin Growth Accelerates
Stablecoin activity became a major revenue contributor. This segment generated $355 million in Q3 alone.
The platform holds $15 billion in USDC. These balances earn interest income for the company.
USDC adoption for payments is increasing. More users keep funds on platform for longer periods.
Coinbase serves as custodian for most U.S. crypto ETFs. This role produces recurring custody fee revenue.
Regulatory clarity is improving across markets. U.S. lawmakers scheduled key votes for January 2026.
These decisions will establish clearer crypto trading rules. Better regulation typically encourages institutional adoption.
The company submitted required disclosures for Europe’s MiCA framework. Compliance efforts span multiple major markets.
Wall Street maintains a positive overall stance. About 65% of analysts covering the stock rate it Buy.
Average price targets imply 55% upside from current levels. Most analysts see long-term value despite volatility.
BofA views the recent decline as a buying opportunity. Their upgrade suggests confidence in the business model.
Product expansion continues at an accelerated pace. The everything exchange vision gains more substance with each launch.
