Wall Street analysts stay bullish on Coinbase after strong Q3, point to derivatives and stablecoins as next growth drivers

Coinbase’s latest earnings report showed a clear rebound in trading and revenue growth after a sluggish spring. The U.S. exchange posted $1.9 billion in total revenue for the third quarter, up 37% from the prior period, driven by higher trading activity in ether and a jump in subscription and services income.

The results helped offset a slight drop in bitcoin’s market share on the platform and reaffirmed Coinbase’s efforts to diversify beyond spot trading.

Following the report, several Wall Street firms issued upbeat notes highlighting what they see as a more mature and better-balanced business model. Analysts said Coinbase is now benefiting from its broader ecosystem spanning derivatives, stablecoins, and its Base network, but cautioned that higher operating costs could pressure margins in the near term.

COIN is trading at $356 on Friday morning, a more than 8% bump from Thursday's close of $328, according to The Block's price page.

Coinbase stock (COIN) price. Source: The Block price page

William Blair: '$4 trillion ecosystem'

William Blair analysts, led by Andrew Jeffrey, reiterated an "Outperform" rating, saying Coinbase is “building the most secure, broadest, and efficient crypto platform” and remains early in its evolution from a trading venue to a full-scale financial infrastructure company.

He highlighted Coinbase’s profit margins of about 45% for the quarter and said growth in derivatives and stablecoin-based payments “will smooth results and generate steady new revenue.” Blair believes those margins could eventually climb toward the high-60% range, even with short-term pressure from the recent Deribit acquisition.

“Growth will not be linear, but trading-volume expansion, maturation of global crypto-derivatives markets, stablecoin commerce, staking, and DeFi are the future,” Jeffrey wrote.

The analysts added that Coinbase deserves to trade at a premium to other fintech firms as investors better appreciate its central role in what he sees as a “$4 trillion crypto ecosystem.”

JPMorgan: “Commanding beat” but costs rising

JPMorgan analysts called the quarter a “commanding beat,” noting earnings of $1.44 per share, well above Wall Street forecasts. Coinbase’s EBITDA — earnings before interest, taxes, depreciation, and amortization, a standard measure of core profitability — came in at $801 million, topping analyst estimates.

Lead analyst Kenneth Worthington said Coinbase’s progress building an on-chain ecosystem “both organically and through acquisitions” is clear, pointing to Deribit’s 73% profit margin and the company’s expanding focus on tokenization and payments.

Still, JPMorgan trimmed its price target slightly to $399 from $404, warning that operating expenses are set to rise about 12% in the fourth quarter due to acquisitions and new hires. He said Coinbase’s upcoming Dec. 17 product event could act as a catalyst if it includes major announcements such as tokenized equities, prediction markets, or a new Base token launch.

“Coinbase remains the pre-eminent acquirer in crypto,” they wrote, noting that its $11 billion cash reserve gives it “an advantaged position to submit competitive bids.”

Benchmark: Stablecoin and Deribit tailwinds

Benchmark’s Mark Palmer reiterated a "Buy" rating and $421 price target, saying Coinbase’s “Everything Exchange” strategy proved “powerfully levered to a crypto bull cycle.”

He pointed to stablecoin-related revenue rising 7% from the prior quarter to $355 million and the Deribit acquisition as key drivers of growth beyond spot trading.

Subscription and services revenue, which includes fees from staking, custody, and stablecoin interest, “beat the upper end of guidance,” Palmer wrote.

He added that Coinbase’s USDC integration “adds stability to its revenue profile, providing both fee and yield-based income while anchoring its broader ecosystem.” Benchmark also noted Coinbase’s 2,772-bitcoin purchase during the quarter and an expanded $2 billion share-repurchase program as signs of confidence.

Bernstein: “Crypto Venmo moment”

Bernstein analysts maintained an "Outperform" rating and a $510 target, calling Coinbase’s quarter “solid” but still shy of their more ambitious expectations.

Lead analyst Gautam Chhugani described Coinbase as being on “the path of a generational business buildout,” fast becoming “the AWS of crypto financial infrastructure.”

Chhugani expects Coinbase to eventually launch a Base token worth “at least a double-digit-billion market value,” and said the company’s new Base app could create a ‘crypto Venmo moment’ by combining trading, payments, and social features.

They also expect Coinbase’s fourth-quarter trading revenue to run roughly 10% higher than Q3 and see potential catalysts in the upcoming “Coinbase System Update” and in progress on the proposed U.S. Clarity Act, which could bring more regulatory certainty to crypto markets.