Key insights
- Monness downgrades Coinbase (COIN) to Sell with a $115 price target, citing regulatory uncertainty from the CLARITY legislation and potential renegotiation of its revenue share agreement with Circle. Concerns about specific provisions in the bill and Circle's growing B2B market share suggest potential headwinds for Coinbase's consumer-focused model. Analyst revisions for lower earnings further support a bearish outlook.
Investing.com - Monness, Crespi, Hardt reiterated a Sell rating on Coinbase Global (NASDAQ:COIN) with a $115.00 price target. The firm cited ongoing uncertainty around the CLARITY legislation and shifting market dynamics in the cryptocurrency sector.The price target implies a 23% downside from the current stock price of $149.63. The stock has declined 13% over the past week and is down 39% over the last six months. An InvestingPro tip notes that 9 analysts have revised their earnings downwards for the upcoming period, reinforcing the bearish outlook.
The research firm noted that passage of the CLARITY bill remains uncertain, with a Democratic Senator viewing probability at 5% while a Republican estimated 30%. Democratic concerns on ethics and continued bank lobby pushback on yield provisions persist as obstacles to the legislation.
Monness stated there is currently no holdup to the revenue share agreement between Coinbase and Circle, though either party can approach to renegotiate terms as autorenewal occurs in August. The firm believes Circle will gain greater platform share over time through its business-to-business work and increasing volumes.
The analyst pointed to Section 404(c)(2)(B) of the CLARITY draft, which prohibits loyalty, promotional, or subscription programs that are economically or functionally equivalent to bank deposit interest. A membership-funded USDC reward program might violate this provision.
Monness said Coinbase remains strongly skewed toward consumers and does not expect the company to remain the primary distribution channel in the future, particularly if the business-to-business thesis plays out. The firm noted that prediction markets and stock trading are revenue share and partnered businesses to date.For deeper analysis, InvestingPro offers 9 additional exclusive tips and comprehensive Pro Research Reports covering COIN and 1,400+ other US equities.
In other recent news, Coinbase Global has been the focus of several significant developments. Baird lowered its price target for Coinbase shares to $142 from $160, maintaining a Neutral rating. The firm anticipates that Coinbase’s second-quarter revenue will fall short of market estimates by 5% to 6% due to weak trading volumes. Meanwhile, Compass Point reiterated a Sell rating for Coinbase, with a price target of $140, following announcements by the CFTC to expand crypto derivatives in the U.S.
Additionally, Circle Internet experienced a 2% drop in its stock value after reports emerged that Stripe, Visa, and Mastercard are preparing to launch a new stablecoin platform. The report also mentioned that Coinbase is exploring participation in this platform. Cryptocurrency and blockchain-related stocks have seen declines, with bitcoin extending its losing streak and reaching its lowest level since October 2024. Ether also experienced a significant drop, hitting a low not seen in over a year.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
ProPicks AI evaluates COIN alongside thousands of other companies every month using 100+ financial metrics. Using powerful AI to generate exciting stock ideas, it looks beyond popularity to assess fundamentals, momentum, and valuation. The AI has no bias—it simply identifies which stocks offer the best risk-reward based on current data with notable past winners that include Super Micro Computer (+185%) and AppLovin (+157%). Want to know if COIN is currently featured in any ProPicks AI strategies, or if there are better opportunities in the same space?