What to Know
Coinbase's Q3 earnings report Thursday will test bullish bets on blockchain rewards and Base token potential.
Analysts diverge on profitability outlook, with JP Morgan bullish on a Base token and subscription model upside.
All agree USDC is a growing revenue driver, but differ on how much Coinbase can actually retain from stablecoin yield.
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Coinbase (COIN) is heading into its third-quarter earnings report on Thursday with Wall Street expecting a strong showing — but with analysts divided on what comes next for the leading U.S. crypto exchange.
According to FactSet, Coinbase is projected to report earnings per share (EPS) of $1.14, quadrupling last year’s $0.28 for the same period. Revenue is expected to climb to $1.8 billion, up from $1.2 billion in Q3 2024. The market expects the boost to come from a mix of higher trading activity, USDC yield income, and blockchain rewards.
Yet while most agree on the near-term momentum, the long-term picture remains contentious. Analysts from JP Morgan, Barclays, and Compass Point broadly see tailwinds from USDC, staking, and Coinbase’s Base network — but differ sharply on how sustainable those earnings really are.
JP Morgan: Bullish on Base Token, “Overweight” Rating
JP Morgan’s Kenneth Worthington remains the most optimistic voice among major banks, upgrading Coinbase to Overweight with a $404 price target for December 2026. His bullish outlook leans heavily on Coinbase’s potential Base token launch.
Worthington believes such a token could command a $12 billion–$34 billion market cap, with Coinbase possibly retaining up to 40% of supply — translating to $14–$42 per share in added equity value.
He also sees significant upside from Coinbase One, the exchange’s paid subscription tier that could eventually gate access to stablecoin yields. “By segmenting USDC rewards through Coinbase One, the company could add up to $1 per share in annual earnings,” Worthington noted, depending on user adoption.
Barclays: Cautious Optimism, Modest Upside
Barclays analyst Benjamin Budish echoes the upbeat revenue outlook but tempers expectations on valuation. While maintaining an Equal Weight rating, Budish expects adjusted EBITDA to come in 6% above consensus, driven by strong retail trading and higher-than-expected USDC-related income.
He models $1.05 billion in transaction revenue and $771 million in subscription and services revenue, both above Street forecasts. Still, Budish cut his price target slightly to $361 (from $365), citing overall multiple compression across financial markets.
Compass Point: Profit Margin Concerns, “Sell” Rating
In contrast, Compass Point’s Ed Engel remains firmly on the bearish side. Despite acknowledging that Coinbase may post a mild beat this quarter, Engel warns that the shift toward lower-margin revenue streams could erode profitability over time.
“USDC yields and staking rewards enhance top-line growth but compress margins,” Engel said, maintaining a Sell rating. He also expressed concerns about slowing retail engagement in the second half of the quarter and increasing competition in derivatives trading, particularly as Coinbase integrates Deribit amid rising activity from regulated venues like CBOE Digital.
Notably, Engel did not comment on Base token speculation, suggesting less confidence in the project’s near-term impact.
Consensus: USDC at the Core of Coinbase’s Growth Story
Despite the disagreements, all three firms converge on one theme — USDC has become a crucial profit engine for Coinbase. Through its partnership with Circle (CRCL), Coinbase benefits directly from interest income tied to stablecoin reserves, even as it experiments with sharing yield and incentivizing paid memberships.
The key question for analysts now is how much of that yield Coinbase can retain versus pass on to users. The company’s efforts to migrate customers to subscription-based models could determine whether USDC becomes a durable earnings pillar or a volatile short-term boost$BTC
