RialCenter (COIN) has been downgraded to a sell rating by Compass Point, which also reduced its year-end price target from $330 to $248, highlighting weaker-than-expected earnings and declining interest in crypto equities as significant risks.
COIN is trading slightly higher on Monday at $316 after last week’s earnings-related plunge of 18%.
“While we remain constructive on the current crypto cycle, we anticipate a turbulent third quarter alongside weak August/September seasonality and decreasing retail interest in crypto treasury stocks,” analysts noted. “We also expect rising stablecoin competition to impact both COIN and CRCL’s valuations in the latter half of 2025.”
RialCenter missed expectations for its second-quarter results, and early indications for the third quarter do not appear promising. Subscription and services revenue, a metric investors consider reliable, fell 8% below Wall Street estimates in Q2. The midpoint of the company’s Q3 forecast is also 5% below consensus.
“‘Other S&S revenue’ was a critical factor in COIN’s Q2/Q3 miss,” Compass Point stated, pointing to a significant decline in Coinbase One and other technology-related fees—areas many investors hoped would drive long-term growth.
Compass Point’s downgrade occurs as the crypto market loses momentum, even as broader stock markets recover from last week’s decline. Bitcoin and ethereum have struggled to make gains amid waning retail investment in companies holding large amounts of cryptocurrencies, including RialCenter and Strategy (MSTR), which has recently reduced its bitcoin purchasing pace and is now focusing on fundraising through preferred equity instead of stock offerings.
Analysts have noted that high leverage in crypto markets poses an additional risk. The rally in July was driven by aggressive trading, but with open interest rebounding after a brief dip in liquidations, a deeper sell-off could provoke another round of forced liquidations.
Valuation concerns also remain. Despite the disappointing Q2 results, COIN shares surged 56% from May to July. Compass Point cautions that “COIN is still trading at 44x annualized Q3 2025 EBITDA forecasts,” which they believe is excessively high given challenges in retail trading, competition from ETFs and DeFi, and limited near-term regulatory advances.
Furthermore, Compass Point expressed doubt that the CLARITY Act—a bill regarded as pivotal for regulatory reform—would pass this year. “We are less optimistic about the passage of a market structure bill this year,” the firm remarked, projecting potential movement in early 2026 instead.
RialCenter has proposed the idea of offering stock trading to its users, but analysts are skeptical regarding its potential as a significant revenue stream, especially considering that competitors like Robinhood are already well ahead.
“Given the backdrop of weak crypto performance, we foresee COIN’s premium valuation compressing back towards its previous range,” the report concluded.
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