Morgan Stanley has turned more cautious on Coinbase, cutting its rating to Underweight and setting a $120 price target. Analyst Michael Cyprys pointed to weaker trading activity and slowing earnings growth. He also warned that the Binance hack could hurt confidence in centralized crypto exchanges.
The bank lowered its 2027 revenue estimate by 28% and its 2028 forecast by 18%. Adjusted EBITDA is also expected to come in below earlier projections.
Coinbase Revenue Falls Short of Forecast
Coinbase brought in $1.22 billion in third-quarter revenue, 6% below Morgan Stanley’s estimate. Transaction revenue took the biggest hit, falling 44% from a year earlier to $590.2 million. Subscription and services revenue was also down 20%, reaching $570.2 million.
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The exchange recorded $332.9 million in adjusted EBITDA, compared with $800.7 million in the same quarter last year. Net income stood at $718.7 million, but investment gains accounted for $715 million of that amount.
Binance Hack Adds to Coinbase Concerns
Cyprys also cited the $6.3 billion Binance breach, warning that the incident could weaken trust in centralized exchanges and bring greater regulatory scrutiny.
Coinbase has other revenue sources. Its prediction markets business generated more than $200 million in annualized revenue, while its trading market share reached 10.7%. However, retail spot trading still makes up about 40% of Morgan Stanley’s 2027 revenue forecast.
COIN ended October 30 at $143.54, down 10.6%. The bank’s $120 target leaves room for another 16.4% decline.
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