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Investing.com -- Coinbase shares may face near-term pressure according to Monness, Crespi, Hardt analysts.
The firm downgraded the stock to Neutral from Buy and removed its price target in a note on Tuesday, citing expectations for a weaker-than-anticipated first quarter and a disappointing Q2 outlook.
“We downgrade to Neutral… on concern 1Q25 likely to be light,” analysts wrote in a note, also removing their price target.
They attributed the call to “tepid QTD txn revenue results” and said the move is “tactical around print as we expect a miss/estimate revision down.”
Monness estimates transaction revenue fell roughly 12% quarter-over-quarter, exacerbated by a rising mix of lower-fee stablecoin trades. They warned that “subscription + services ETH price drag doesn’t seem to be fully appreciated by consensus.”
Coinbase’s market share is said to remain a bright spot. “Share of volumes looks remarkably healthy,” analysts wrote, noting that trading declines in March and April were “more muted than market.”
The firm also flagged new risks from Washington, specifically delays to the GENIUS Act, a proposed stablecoin regulatory framework.
The bill “hit some snags over the weekend” after nine Democratic senators withdrew support, citing concerns over anti-money laundering provisions and regulatory oversight. This leaves “an air gap to the 60 votes needed” to advance the legislation, says the firm.
Monness believes the current version of the bill could create “heightened regulatory complexity,” with fragmented oversight and compliance challenges that may limit industry scalability.
By contrast, they state that the STABLE Act, which requires federal supervision and a bank license, “quite possibly ends up as a net benefit to Coinbase (NASDAQ:COIN),” given its compliance-forward posture.
Despite the downgrade, the firm remains positive on Coinbase in the long term, citing “TAM expansion and real-world utility” and improving profitability.
“Economics of this business over time are more likely than not to continue improving as a matter of scale,” they wrote.
