Coinbase Earnings Disappointed. Wall Street Is Split on the Stock.

Compass Point downgraded the stock to Sell from Neutral after the crypto exchange’s lackluster earnings print. Others are at Buy. (Dreamstime)

There are no two ways about it: Coinbase Global had a brutal second quarter.

Revenue fell 26% from a year ago and operating expenses increased 15%, the company reported last Thursday. The earnings print prompted a sell-off, with shares of the cryptocurrency exchange plummeting 17% Friday.

Wall Street disagrees about whether to abandon ship or buy the dip. Coinbase stock was rising 1.2% to $318.32 Monday as two analysts’ offered dueling narratives about the company’s latest financials and future prospects. One downgraded the Coinbase stock to Sell.

Mark Palmer of Benchmark Equity Research made the bull case, saying the disappointing earnings print doesn’t change the long-term investment thesis around Coinbase. Benchmark reiterated a Buy rating on the stock with a $421 price target in a note Monday.

“We think any investor with a reasonable investment horizon is likely to be rewarded for treating the print as nothing more than a distraction,” Palmer wrote. The company, he argued, is positioning itself as a leader in a crypto industry poised for growth.

One reason for optimism is the company’s agreement with Circle Internet Group , the issuer of the USDC stablecoin. Following the passage of the Genius Act, which establishes a regulatory framework for stablecoins, adoption of the currency should pick up. That means more distribution revenue for Coinbase, Palmer said.

Another bill, the Digital Market Clarity Act, is moving through Congress and would divide oversight of crypto exchanges, brokers, and tokens between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Industry experts believe the bill will make institutional players more comfortable dealing with digital assets, and Palmer says Coinbase is likely to be a key beneficiary through its crypto-as-a-service offering for enterprises.

Ed Engel of Compass Point Research & Trading, however, sees broader shifts in the crypto market that make Coinbase less attractive. Compass Point downgraded Coinbase stock to Sell from Neutral, and cut its price target to $248 from $330.

Coinbase’s bread and butter remains retail crypto trading, which typically is soft in August and September and bodes poorly for the company’s third-quarter revenue. Meanwhile, interest in crypto treasury stocks such as MicroStrategy is waning, Engel said—another negative indicator.

“While the company is focused on growing non-retail trading businesses, we believe COIN’s core profit driver is being disrupted,” Engel wrote.

The Clarity Act, Engel conceded, would help expand the overall market. But the bill’s passage this year, let alone this quarter, is far from certain.

“We see congress passing the CLARITY act in [first quarter 2026], which could slow crypto’s regulatory momentum and disappoint bullish traders,” Engel added.

After the lackluster earnings report and ensuing sell-off, Wall Street still leans more toward Benchmark’s conclusion than Compass Point’s. Of the 38 analysts polled by FactSet, 15 rate Coinbase stock a Buy or Overweight, 18 are at Hold, and just four say Sell.

But the spread of price targets and opinions is wide, and the recent earnings report may have created more questions than answers.

Write to Nate Wolf at nate.wolf@barrons.com