Coinbase’s Q4 Fiasco: Shares Surge Amid Analyst Pessimism – A Market Paradox!

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Markets

What to know:

  • In an astonishing twist of fate worthy of a Shakespearean comedy, Coinbase shares climbed 12% despite the company’s valiant efforts to miss every conceivable fourth-quarter revenue and profit target known to man, not to mention incurring a rather impressive loss from crypto investments that even Midas would envy.
  • Our favorite financial seers-analysts, of course-have taken to slashing their price targets like a hot knife through butter, while simultaneously waving their crystal balls around to express concern over near-term earnings and the ongoing struggle to monetize consumers. How very dramatic!
  • Yet, amidst this turmoil, they have unearthed glimmers of hope in Coinbase’s growing derivatives business and its stablecoin footprint, as if the company’s future were not hanging by a thread but was instead supported by a series of well-placed cushions.

Indeed, shares of Coinbase (COIN) experienced a most curious uptick of 12% on Friday, all while the crypto exchange was busy crafting a narrative of missing earnings expectations that would make even the most seasoned playwright weep. Analysts responded with a cocktail of cautious pessimism and optimistic bravado about the company’s evolution-a delightful mix of emotions truly befitting a soap opera.

The company, in an act of defiance, reported net revenue of $1.71 billion-less than the $1.81 billion that Wall Street had so whimsically predicted. Meanwhile, the core operating profit (adjusted EBITDA) landed at $566 million, a figure that might make one chuckle if it weren’t so tragically below the consensus of around $653 million.

In a spectacular display of accounting wizardry, Coinbase also reported a net loss of $667 million, primarily attributed to a staggering $718 million unrealized loss on its crypto investment portfolio. To add to the melodrama, there was a $395 million loss on strategic investments, making one wonder if “strategic” is merely a euphemism for “not-so-great planning.”

Barclays analyst Benjamin Budish, in his role as the harbinger of doom, described Q4 as “a miss across the board.” He lamented the weak transaction and subscription revenues and highlighted operating expenses that seemed to have taken a rather extravagant vacation. Budish lowered his price target to $149 from $258, declaring that trading activity and stablecoin-related interest income still dominated the performance narrative-what a gripping tale!

Yet, ever the optimist, he did acknowledge some encouraging trends, like the rising share of the USDC market cap-one can only assume this must be celebrated with confetti-and a growing subscriber base for Coinbase One, coupled with share buybacks that reduced the overall count by a modest 8%. Bravo!

Benchmark’s Mark Palmer, ever the silver lining enthusiast, echoed a more buoyant long-term perspective, pointing out that despite the headline results resembling a shipwreck, Coinbase’s improvements in its derivatives business and product suite indicated a delightful metamorphosis into something “diversified and durable.” He retained a buy rating, albeit reducing his price target to $267 from $421-ever the pragmatist!

Then we have Clear Street’s Owen Lau, who noted that Coinbase’s consumer monetization is facing a bit of a rough patch, akin to a sitcom character caught in a love triangle. The retail take rate fell from 1.43% in Q3 to 1.31% in Q4-a decline spurred by a shift towards advanced trading tools. Lau adjusted his price target to $277 from $344, citing a prolonged crypto downturn and the dreaded specter of weak retail participation.

Despite the underwhelming performance report, Lau remained optimistic about Coinbase’s long-term positioning, noting the existence of twelve business lines generating over $100 million annually-two of which are apparently strutting around boasting revenues exceeding $1 billion.

And finally, JPMorgan, in a fit of cautiousness, joined the fray by lowering its price target on COIN, citing the ever-looming pressure on near-term earnings. How original!

Nevertheless, Coinbase has reiterated its commitment to remaining adjusted EBITDA positive, a feat supported by a whopping $14.1 billion in total available resources. Management, in an act of sheer marketing genius, continues to buy back stock and accumulate bitcoin using a portion of its operating income-because nothing says stability quite like accumulating digital coins, right?

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2026-02-13 19:39