Coinbase, Circle shares dip after new coverage at Raymond James

Investing.com -- Shares in Coinbase and USDC issuer Circle Internet Group dipped Wednesday after Raymond James initiated coverage of the stocks with Market Perform ratings, pointing out balanced risk-reward profiles for both digital asset companies amid a challenging crypto trading environment. The broker set a fair value of $158 for Coinbase and $70 for Circle.

Circle stock fell 3.2% in premarket trading by 08:32 ET, while Coinbase shed 1.5%.

For Coinbase, Analyst Madison Suhr highlighted a sharp slowdown in trading activity. "Specifically, retail and institutional transaction volume declined 54% and 48% y/y, respectively, in 1Q26, which resulted in a 40% decline in transaction revenue."

He noted Coinbase has gained trading volume market share even as the broader market weakened, rising to 8.6% in the first quarter of 2026 from an average of 5-6% in 2025.

Suhr flagged competitive pressure as a growing concern. E*TRADE has launched crypto spot trading and is expected to charge roughly 50 basis points per transaction, about one-third of Coinbase’s cost, while Charles Schwab is expected to launch crypto trading this year at roughly 75 basis points.

Coinbase’s average retail yield stands at about 150 basis points. Suhr said he sees "a balanced risk/reward" given limited visibility into when crypto trading volumes might rebound, though the analyst highlighted Coinbase’s "Everything Exchange" strategy, including prediction markets, derivatives and lending, as a potential source of upside.

Raymond James’ Circl report, meanwhile, centered on valuation. "With the Street modeling USDC circulation growth of 26% in 2026 and 35% in 2027, we lack conviction there is meaningful upside to estimates over the medium term," Suhr wrote.

Circle shares are trading at about 18 times 2027 EBITDA, a 31% premium to fintech and crypto peers, and 25 times EV/EBITDA including stock-based compensation, a roughly 70% premium to comparable companies.

Suhr did point to potential catalysts for the stablecoin issuer, including the rollout of its proprietary layer-1 blockchain, Arc, which is designed to use USDC as its native gas asset rather than a more volatile token.

Key risks cited for Circle included interest rate sensitivity, given its revenue model is tied to reserve income, along with its distribution concentration with Coinbase, which accounts for roughly 25% of USDC’s market capitalization.

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