Baird on Wednesday began coverage of Coinbase with a Neutral recommendation, describing the stock's outlook as a balance between growth potential and near-term risks. Analyst Robert Bamberger acknowledged Coinbase as "a strong franchise and solid growth story," but said current trends make it difficult to adopt a more favorable stance without "an incremental pullback."
The note outlines Coinbase's role as the largest U.S. cryptocurrency platform, serving both retail and institutional customers and offering developer tools for blockchain applications. Baird emphasized the company's dual-revenue model: transaction fees represented roughly 58 percent of third-quarter 2025 revenue, while subscription and services made up the remaining 42 percent.
Subscription and services revenue covers a range of businesses, including USDC revenue sharing, staking rewards, finance and lending activities, custody fees and Coinbase One subscriptions. Baird highlighted the expansion of recurring revenue - subscription income now represents about 40 percent of total revenue, up from roughly 4 percent in 2020 - a shift the firm believes supports a more stable earnings base over time.
On the competitive front, Baird pointed to several advantages for Coinbase. The firm noted the company’s "first mover" status and a U.S. spot-market share exceeding 50 percent. Baird also described Coinbase’s "Everything Exchange" strategy, which seeks to broaden the platform into derivatives, prediction markets and stock trading, potentially diversifying and enlarging future revenue streams.
Despite those positives, Baird laid out reasons for the Neutral rating. The brokerage said fourth-quarter revenue is likely to fall short of expectations as trading volumes have weakened in the aftermath of October’s crypto market collapse, during which $19 billion in leveraged positions were liquidated. Baird also called attention to the ongoing uncertainty tied to the Clarity Act, tightening retail spreads and the company's sensitivity to lower interest rates.
Putting a valuation on the shares, Baird established a $240 price target for COIN, based on 34 times 2027 adjusted earnings. The firm’s view frames Coinbase as a business with meaningful strengths but also material near-term headwinds that constrain upside for now.
Key takeaways
- Coverage initiated at Neutral as Baird balances Coinbase’s franchise strength against weakening trading activity and regulatory ambiguity.
- Transaction fees made up about 58% of Q3 2025 revenue; subscription and services accounted for about 42%, with subscription revenue rising to roughly 40% of total from about 4% in 2020.
- Baird set a $240 price target on COIN, using a multiple of 34 times 2027 adjusted earnings.
Impacted sectors
- Cryptocurrency platforms and exchanges
- Financial services and fintech products tied to trading and custody
- Markets sensitive to trading volumes and interest-rate movements
Risks and uncertainties
- Weak trading volumes could lead to a fourth-quarter revenue shortfall, affecting exchange and trading-dependent revenue streams.
- Regulatory uncertainty, including questions around the Clarity Act, creates policy risk for U.S. crypto operations and related services.
- Narrowing retail spreads and sensitivity to lower interest rates could pressure revenue from transaction-related and finance businesses.