Compass Point reiterates Coinbase stock Sell rating on regulatory risk

Compass Point reiterates Coinbase stock Sell rating on regulatory risk

U.S. futures slide with AI worries in focus; Netflix disappoints Investing.com - Compass Point reiterated a Sell rating on Coinbase Global Inc. (NASDAQ:COIN) stock with a $140 price target on Friday, citing concerns about upcoming legislation and weakening fundamentals. The target implies significant downside from the current price of $160.49, with the stock already down 61% over the past year and 33% in the last six months. InvestingPro data reveals the company is currently overvalued relative to its Fair Value, while three analysts have recently revised their earnings downwards for the upcoming period.

The firm expects the Senate to vote on the Clarity Act before Coinbase reports second-quarter results on July 30. Compass Point views the legislative outcome as a more significant driver for the stock than earnings. The firm’s second-quarter revenue forecast sits slightly below consensus estimates.

Compass Point anticipates third-quarter guidance will reflect Coinbase’s weakest quarter-to-date performance. Compass Point projects $50 million in prediction market revenue for the second quarter, which translates to $200 million in annualized run rate but only $25 million in gross profit for the quarter. The firm noted Coinbase double-counts revenue relative to competitors in this segment.

The firm sees risk that perpetual futures products could cannibalize spot revenue in the second half of 2026 due to increased competition and lower take rates. Compass Point stated the bull case depends on passage of the Clarity Act, which would leave limited support for the stock if the bill fails in the Senate this month. For investors seeking deeper insights, InvestingPro offers 10 additional exclusive tips and comprehensive analysis for COIN, including detailed Pro Research Reports available for over 1,400 US equities.

In other recent news, Coinbase Global Inc. has been the subject of several analyst updates and company developments. Oppenheimer lowered its price target for Coinbase to $209 from $224, citing a 13% reduction in its second-quarter 2026 trading volume estimate due to a broader crypto market sell-off. Despite this, Coinbase’s global spot market share increased to approximately 8% in the second quarter from 6% in the first quarter of 2026.

William Blair reiterated its Outperform rating on Coinbase, although it reduced its revenue estimates for 2026 and 2027 by 12% and 13%, respectively, and cut its EBITDA projections by 34% for both years. BTIG also adjusted its outlook, lowering the price target to $260 from $280, while maintaining a Buy rating, primarily due to weak crypto spot volume trends. Meanwhile, Coinbase is investigating a trading issue affecting prediction markets on its platform, which has impacted customers’ ability to place trades.

Additionally, Marex Group Limited announced that clients can now use USDC, a stablecoin, as initial margin collateral for derivatives trading, with Coinbase providing the necessary infrastructure. These recent developments highlight the dynamic environment in which Coinbase operates and the ongoing adjustments by analysts and partners in response to market conditions.