"Time to lock in profits": analyst advised to sell Coinbase shares before the report

Monness analyst Crespi Hardt refused the advice to buy shares of cryptocurrency exchange Coinbase three days before the quarterly report, which is expected this week. According to the expert, now is the time to lock in profits, as the company's fundamentals are not keeping up with the growth of its shares, caused by the excitement around the cryptocurrency sphere. This is the second such recommendation to investors from analysts in a month.

Monness Crespi Hardt analyst Gus Gala downgraded shares of cryptocurrency exchange Coinbase from Buy to Neutral and removed his target price, reports MarketWatch.

"It's time to lock in profits," Gala said in a note that was published just days before the company's quarterly report (expected July 31 after the close of trading). According to the analyst, Coinbase's market value has risen too much over the past couple months - even with the positive regulatory news in the crypto sector and the rise of bitcoin.

Gala believes that it is difficult to justify the current overvaluation of securities by improving investor sentiment - this would require a steady increase in real trading volumes on the Coinbase platform, which has not been observed so far. In addition, the current growth of the crypto market has lasted for 31 months, which increases the risks of a correction. Gala in May set the target price of Coinbase shares at $300 - the securities overcame it after six weeks, showing growth of almost 90%, while bitcoin for the same period added only about 14%, notes MarketWatch.

Analyst Monness Crespi Hardt noted that he will be ready to return to analyzing Coinbase shares when they become cheaper and the hype around cryptocurrencies subsides. According to him, the company will only be able to maintain its current high valuation if there is a real increase in trading activity, but he considers this scenario too optimistic to recommend buying at current levels.

Wall Street expects Coinbase's earnings to rise to $1.33 per share in the second quarter from $0.14 a year earlier, while revenue is expected to rise 10.4% to $1.6 billion, MarketWatch notes, citing FactSet data. At the same time, growth in total trading volume on the Coinbase platform is forecast at 5.6% to $238.6 billion, the publication adds.

At the end of trading on July 28, Coinbase shares fell in price by 3.1% to $379.5. That became their low for more than a week. The company's shares fell in price for the sixth consecutive trading session, having already lost about 10% relative to the historic high of $419.78 reached on July 18. 

Nevertheless, compared to the beginning of the year, the market value of Coinbase is now more than 52% higher. For comparison: the main U.S. stock index S&P 500 for the same period added about 8.5%. Investors bought up the company's shares because of a number of good news: Coinbase included in the S&P 500, the company launched a platform for payments in stablecoins amid excitement in this segment, and bitcoin updated records. This came after U.S. President Donald Trump signed the Genius Act, which regulates the stablecoin market, MarketWatch specifies.

In mid-July, HC Wainwright said a similar opinion to Crespi Hardt's Monness: the investment bank analyst also advised investors to sell Coinbase shares and lock in profits ahead of the quarterly report. According to analyst HC Wainwright, after a sharp rise in the stock price over the past few months, the valuation of the company's securities is now too inflated and ahead of fundamentals, and Coinbase's quarterly report will not meet Wall Street's expectations.

Cantor Fitzgerald is taking a more positive view: last week, its analyst raised his target price on Coinbase shares from $292 to $500 and maintained an Overweight rating ("above market"). Amid the growth of the stablecoin segment and the rally in the crypto market, Cantor Fitzgerald also improved Coinbase's 2026 earnings per share forecast and now expects it to be $10.76 instead of $8.36 in the previous forecast. Cantor highlighted three key reasons for optimism: it expects the decline in transaction revenue to be less severe than previously thought; companies are increasingly developing strategies with stablecoins, which is increasing this source of revenue; and the recent growth in rewards in blockchain-based stacking (PoS) is bringing more revenue to Coinbase.

48% of analysts, who gave ratings to Coinbase securities, are neutral and advise to keep previously purchased shares in the portfolio (Hold). Another 45% recommend investors to buy them (Buy and Overweight ratings), while the rest recommend to sell them (Underweight and Sell). The Wall Street consensus price target of $350 implies a decline in the company's market value of more than 10%.

This article was AI-translated and verified by a human editor