Shares of Coinbase Global fell nearly 7% to around $152 on Friday after Baird reiterated its Neutral rating and lowered its price target on the cryptocurrency exchange operator. The stock has dropped roughly 34% since the start of the year as crypto prices remain near their 52-week lows.
Baird named Coinbase a “Bearish Fresh Pick,” warning that weak trading volumes could persist and lead to disappointing second-quarter results. While Coinbase has expanded beyond its core trading business in recent years, transaction revenue still drives a significant portion of its financial performance.
Revenue outlook clouded by low trading activity
Baird analyst David Koning expects Coinbase’s second-quarter revenue to be about 5% to 6% below Wall Street estimates. He projects trading volumes could decline by 15% to 20% from the first quarter. Activity across the crypto market has remained subdued despite some improvement in early June.
“April and May were two of the slowest months in the past few years,” Koning wrote. He noted that Robinhood’s chief brokerage officer recently highlighted strength in equities, options, futures, and predictions but made no mention of crypto.
Baird also questioned whether the modest rebound in June volumes reflects sustainable demand. “While the first few days of June showed decent volume, closer to average levels of recent years, we think it’s due to significant trading out of Bitcoin, which may be followed by limited interest in trading,” Koning wrote.
The brokerage argued that the broader crypto market faces several headwinds, including the strong performance of the S&P 500, elevated inflation, high borrowing costs, and competition from other high-growth investment themes like artificial intelligence stocks and new initial public offerings.
Regulatory uncertainty continues to weigh
Baird also pointed to uncertainty surrounding the proposed CLARITY Act, a market-structure bill that many crypto supporters view as an important step toward wider industry adoption. The firm said legislative disagreements over ethics and crypto issuance issues make it increasingly unlikely the bill will pass before the November midterm elections. This delay could allow banks and financial technology companies operating under existing regulatory frameworks to strengthen their competitive positions.
Prediction market platform Polymarket currently assigns a 57% probability that the legislation will become law this year, down from 65% a month earlier.
Valuation debate heats up
Alongside concerns about slowing growth, Baird argued that Coinbase’s valuation could face additional pressure if earnings expectations continue falling. The brokerage lowered its price target to $142 from $160 and noted the stock trades at roughly 35 times estimated 2027 earnings per share.
“The combo of falling estimates and weak multiples across beat/raise fintechs could eventually bleed into COIN’s valuation,” the firm wrote. In its bear-case scenario, Baird believes the stock could decline to between $75 and $90 if 2027 earnings per share fall to $3 and the valuation multiple contracts to 25 to 30 times earnings.
Despite the cautious outlook, Baird remains more bearish than much of Wall Street. According to FactSet data, about 64% of the 39 analysts covering Coinbase currently rate the stock a Buy, with the average price target around $231.
