JPMorgan reduced its valuation from $290 to $252 due to weak trading volumes and rising operating expenses.
Despite the adjustment, firms maintain positive ratings, highlighting profitability and global market share expansion.
The growth of services like Base, USDC, and the Deribit acquisition emerge as strategic drivers for recovery.
The latest earnings report from the largest cryptocurrency exchange in the United States has sparked cautious reactions across the financial sector. This follows the announcement that Wall Street slashes Coinbase price target after the company failed to meet the profit estimates projected for the fourth quarter of the year.
Prominent industry analysts from JPMorgan and Canaccord led the adjustments, citing weakness in digital asset prices. This situation directly impacted transaction fees, which constitute a vital portion of the platform’s revenue.
Even though shares have plummeted nearly 40% so far this year, JPMorgan decided to maintain its “overweight” rating. However, experts adjusted their outlook from $290 to $252, reflecting a higher operating cost structure.
The report reveals that a 22% increase in operating expenses and a shift toward lower-fee services, such as Coinbase One, pressured margins. Consequently, analysts lowered their expectations regarding the take rate—the percentage of revenue retained from each transaction.
Nevertheless, it is not all pessimism in the institutional market, as Canaccord highlights the exchange’s solid profitability in the face of volatility. In fact, the firm maintains a “buy” recommendation, though it reduced its target from $400 to $300 following a revision of its short-term estimates.
Coinbase’s diversification strategy, which includes the growth of the Base network and international expansion via Deribit, remains a strong point. Analysts emphasize that the exchange is gaining market share and strengthening its ecosystem despite the current macroeconomic environment.
In summary, the market expects Coinbase to increase its share buyback program while navigating this bearish cycle. Service selectivity and operational efficiency will be decisive in reaching the new price targets set by experts.
Wall Street Slashes Coinbase Price Targets After Q4 Earnings Miss - Crypto Economy
TL;DR:
The latest earnings report from the largest cryptocurrency exchange in the United States has sparked cautious reactions across the financial sector. This follows the announcement that Wall Street slashes Coinbase price target after the company failed to meet the profit estimates projected for the fourth quarter of the year.
Prominent industry analysts from JPMorgan and Canaccord led the adjustments, citing weakness in digital asset prices. This situation directly impacted transaction fees, which constitute a vital portion of the platform’s revenue.
Even though shares have plummeted nearly 40% so far this year, JPMorgan decided to maintain its “overweight” rating. However, experts adjusted their outlook from $290 to $252, reflecting a higher operating cost structure.
Pressure Factors and Expansion Opportunities
The report reveals that a 22% increase in operating expenses and a shift toward lower-fee services, such as Coinbase One, pressured margins. Consequently, analysts lowered their expectations regarding the take rate—the percentage of revenue retained from each transaction.
Nevertheless, it is not all pessimism in the institutional market, as Canaccord highlights the exchange’s solid profitability in the face of volatility. In fact, the firm maintains a “buy” recommendation, though it reduced its target from $400 to $300 following a revision of its short-term estimates.
Coinbase’s diversification strategy, which includes the growth of the Base network and international expansion via Deribit, remains a strong point. Analysts emphasize that the exchange is gaining market share and strengthening its ecosystem despite the current macroeconomic environment.
In summary, the market expects Coinbase to increase its share buyback program while navigating this bearish cycle. Service selectivity and operational efficiency will be decisive in reaching the new price targets set by experts.