Key Takeaways:
- Coinbase fell 7% to about $152 after Baird warned of weak trading volumes
- Q2 revenue expected 5-6% below consensus with volumes down 15-20% sequentially
- Baird cut its price target to $142 from $160 and named COIN a Bearish Fresh Pick
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Coinbase falls 7% as Baird flags weak volumes and valuation risk
Coinbase Global Inc. fell 7% to about $152 after Baird warned weak trading volumes could drive a second-quarter revenue miss.
"April and May were two of the slowest months in the past few years," David Koning, an analyst at Baird, said in a note Friday. The firm lowered its price target to $142 from $160 and designated Coinbase a "Bearish Fresh Pick."
Koning expects second-quarter revenue to come in 5% to 6% below Wall Street estimates, with trading volumes declining 15% to 20% sequentially. While early June showed some pickup, he attributed the improvement to heavy Bitcoin selling rather than sustained demand. The stock trades at roughly 35 times estimated 2027 earnings per share, a premium Koning said looks increasingly exposed as estimates fall.
The bear case sees Coinbase falling to between $75 and $90 if 2027 earnings per share drop to $3 and the multiple contracts to 25 to 30 times earnings. Regulatory uncertainty adds pressure: the CLARITY Act, a market-structure bill viewed as a catalyst for broader adoption, now has a 57% probability of passing this year on Polymarket, down from 65% a month ago, as legislative disagreements over ethics and crypto issuance issues delay progress.
The shares have declined roughly 34% since the start of 2026 as cryptocurrency prices hover near 52-week lows. Baird noted that Robinhood Markets Inc.'s chief brokerage officer recently highlighted strength in equities, options, futures and predictions but made no mention of crypto, showing the subdued interest in digital asset trading.
The broader crypto market faces headwinds from the strong performance of the S&P 500, elevated inflation, high borrowing costs and competition from other high-growth investment themes such as artificial intelligence stocks and new initial public offerings, according to Baird.
Despite the cautious outlook, about 64% of the 39 analysts covering Coinbase rate the stock a Buy, with an average price target of about $231, according to FactSet data.
The CLARITY Act delay could allow banks and financial technology companies operating under existing regulatory frameworks to strengthen their competitive positions against crypto-native exchanges, Baird said. Koning recommended selling Coinbase and buying a basket of bank and fintech beneficiaries including JPMorgan Chase & Co. and PayPal Holdings Inc.
This article is for informational purposes only and does not constitute investment advice.
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