Shares of Coinbase Global COIN fell on Friday after Baird reiterated its Neutral rating on the cryptocurrency exchange operator but warned that weak trading activity could continue to weigh on its business and lowered its price target.
Coinbase stock fell nearly 7% during trading, to about $152.
With crypto prices hovering near 52-week lows, the stock has struggled throughout 2026, declining about 34% since the start of the year.
Baird also labeled Coinbase a “bearish fresh pick,” citing concerns that low volumes could continue for an extended period of time, leading to disappointing second-quarter results.
Weak trading activity casts a shadow on earnings outlook
Although Coinbase has expanded beyond its core trading business over the past few years, transaction revenue remains a key driver of its financial performance.
Baird analyst David Corning expects the company’s second-quarter revenue to be about 5% to 6% below Wall Street expectations, and trading volume to be down 15% to 20% from the previous quarter.
The analyst noted that despite some improvement in early June, overall crypto market activity remains subdued.
“April and May were two of the weakest months in years,” Corning wrote, noting that Robinhood’s chief securities officer recently highlighted strength in stocks, options, futures and forecasts, but did not mention cryptocurrencies.
Baird also questioned whether the slow recovery in volumes in June reflected sustainable demand.
“While the first few days of June saw decent volume (close to recent average levels), we believe this was due to significant trading in Bitcoin, which may see limited trading interest thereafter,” said analyst David J. Corning.
The brokerage maintained that the overall crypto market continues to face several headwinds, including the strong performance of the S&P 500, rising inflation, high borrowing costs, and competition from other high-growth investment themes such as artificial intelligence stocks and initial public offerings.
Regulatory uncertainty remains a concern
Baird also pointed to the uncertainty surrounding the proposed CLARITY Act, a market structure bill that many crypto advocates see as an important step toward broader industry adoption.
The company said legislative disagreements over ethics and crypto-issuance issues make it increasingly unlikely that the bill will pass before the November midterm elections.
Baird said the delay could help banks and financial technology companies operating under the existing regulatory framework strengthen their competitive position.
Prediction market platform Polymarket currently estimates the bill has a 57% chance of passing this year, down from 65% last month.
Evaluation debate intensifies
Along with concerns about slower growth, Baird also argued that if revenue expectations continue to decline, that could put further pressure on Coinbase’s valuation.
The brokerage lowered its price target to $142 from $160, noting that the stock currently trades at approximately 35 times estimated 2027 earnings per share.
“The combination of lower expectations and lower multiples across Beat/Rays FinTech could ultimately impact COIN’s valuation,” the company wrote.
In a bearish scenario, Baird believes the stock could fall to between $75 and $90 if earnings per share decline to $3 in 2027 and the valuation multiple is 25 to 30 times earnings.
Despite his cautious outlook, Baird remains bearish compared to many on Wall Street.
About 64% of the 39 analysts covering Coinbase currently rate the stock a “buy,” with an average price target of about $231, according to FactSet data.
