Coinbase Downgraded to Sell by Compass Point with Price Target Cut

Compass Point downgraded Coinbase (COIN) to a sell rating and reduced its year-end price target from $330 to $248, citing:

COIN is currently trading at $316 after an 18% drop following recent earnings. Key points include:

Q2 subscription and services revenue was 8% below Wall Street estimates.
The Q3 forecast midpoint is 5% lower than consensus.
A significant decline in 'Other S&S revenue' contributed to the earnings miss.
Retail investors are pulling back from crypto treasury stocks, affecting COIN's outlook.
Elevated leverage in crypto markets poses additional risks.
Despite weak Q2 results, COIN shares increased by 56% from May to July.
Current valuation is high at 44x projected annualized EBITDA for Q3 2025.
Uncertainty surrounds regulatory reforms, with skepticism about the CLARITY Act passing this year.
Coinbase's potential stock trading offering may not significantly impact revenue due to competition.

The report concludes that COIN's premium valuation may compress towards historical levels amid ongoing challenges.