Bernstein previews Q3 earnings for digital asset stocks: Coinbase (COIN.US) faces earnings pressure, Robinhood's (HOOD.US) prediction market business emerges as a bright spot.

Bernstein noted in a latest research report released on October 26 that as cryptocurrency and blockchain-related companies gradually shift from traditional digital currency trading to new businesses such as prediction markets, asset tokenization, and financial derivatives, the growth logic of the digital asset industry is undergoing a transformation. Although the cryptocurrency market recovered somewhat in the third quarter, traditional spot trading activity remained weak, and the commercialization progress of new products is becoming the key factor determining the future growth potential of relevant companies. In its third-quarter earnings preview for Robinhood (HOOD.US), Coinbase (COIN.US), Circle (CRCL.US), and Figure (FIGR.US), Bernstein maintained an "Outperform" rating on all four companies but made different adjustments to their profit outlooks and target prices. Among them, the institution sharply lowered Coinbase's target price from US$330 to US$250, while raising Circle's target price from US$140 to US$145, and maintained Robinhood's and Figure's target prices at US$160 and US$70, respectively. Coinbase Faces Pressure from Weak Traditional Cryptocurrency Trading; Target Price Sharply Cut Bernstein expects Coinbase's third-quarter revenue to be approximately US$1.268 billion, up about 4% quarter-on-quarter, and adjusted EBITDA to be approximately US$222 million, up about 7% quarter-on-quarter. However, its adjusted EBITDA forecast is below the market consensus estimate of US$280 million. The report noted that Coinbase's third-quarter cryptocurrency spot trading volume is expected to be approximately US$1.5 trillion, basically flat compared with the previous quarter. During the same period, spot trading volume across the cryptocurrency industry fell about 8% quarter-on-quarter, reflecting that market trading activity remains insufficient. The stablecoin business is expected to be the biggest driver of Coinbase's quarter-on-quarter revenue growth in the third quarter. Although the average circulating supply of USDC declined somewhat, cooperation with Hyperliquid is expected to increase USDC balances on the Coinbase platform, thereby driving growth in stablecoin-related revenue. In addition, Bernstein expects Coinbase's prediction market business revenue to grow about 60% quarter-on-quarter in the third quarter. The business's annualized revenue scale had already exceeded US$100 million in the second quarter. However, because traditional cryptocurrency trading volume continues to fall short of previous expectations, Bernstein sharply lowered Coinbase's financial forecasts for the next three years, cutting its revenue expectations for 2026, 2027, and 2028 by 32%, 31%, and 28%, respectively, to approximately US$5.5 billion, US$7.9 billion, and US$10.7 billion. At the same time, the institution lowered Coinbase's 2026 earnings per share forecast from US$5.97 to a loss of US$2.60, and cut its 2027 earnings per share forecast from US$13.20 to US$4.15. Nevertheless, Bernstein remains optimistic about Coinbase's long-term potential to transform into a comprehensive trading platform. The institution expects that by 2028, new products such as perpetual futures, derivatives, and prediction markets are expected to contribute approximately US$2 billion in revenue to Coinbase, accounting for 19% of the company's total revenue, a significant increase from less than US$600 million in 2026. Robinhood Benefits from Growth in Equities, Options, and Prediction Market Trading; New Business Revenue Share Expected to Rise to 25% Compared with Coinbase, Bernstein is more optimistic about Robinhood's growth prospects. The institution expects Robinhood's third-quarter revenue to be approximately US$1.473 billion, up 13% quarter-on-quarter, above the market consensus estimate of US$1.434 billion; adjusted EBITDA is expected to be US$819 million, above the market expectation of US$770 million; earnings per share are expected to be US$0.60, also above the market expectation of US$0.57. The main factors driving performance growth are continued active trading in equities, options, and prediction markets. Bernstein expects Robinhood's third-quarter equity trading volume to reach approximately US$990 billion, up 4% quarter-on-quarter and a new quarterly high; equity options trading volume to be approximately 900 million contracts, up 17% quarter-on-quarter; and event contract trading volume to reach approximately 16.4 billion contracts, up 21% quarter-on-quarter. At the same time, cryptocurrency trading volume on Robinhood and its Bitstamp platform is expected to be approximately US$50 billion, up 22% quarter-on-quarter, indicating that related trading activity is recovering from the sluggish state in the second quarter. In terms of new businesses, Bernstein is especially optimistic about the development potential of prediction markets. The institution expects Robinhood's prediction market business revenue to grow from approximately US$649 million in 2026 to approximately US$1.688 billion in 2028, at which point it will account for about 18% of the company's total revenue. In addition, Robinhood also plans to expand cryptocurrency perpetual futures trading within the United States and promote real-world asset tokenization through Robinhood Chain. Bernstein expects that the combined revenue share contributed by prediction markets, derivatives, and tokenization businesses will rise from about 3% in 2025 to 25% in 2028, helping reduce the company's dependence on traditional cryptocurrency spot trading. Based on growth in equity trading and new product revenue, the institution raised Robinhood's revenue forecasts for 2026 to 2028 by 3%, 4%, and 3%, respectively, and raised its 2026 earnings per share forecast from US$2.05 to US$2.26, while maintaining its US$160 target price unchanged. Circle Supported by Stablecoin and New Blockchain Businesses; Target Price Raised to US$145 Stablecoin issuer Circle also received a relatively positive assessment from Bernstein. The institution expects Circle's third-quarter revenue to be approximately US$772 million, up about 10% quarter-on-quarter; adjusted EBITDA is expected to be approximately US$194 million, up about 36% quarter-on-quarter. Although the average circulating supply of USDC in the third quarter fell from approximately US$77 billion in the previous quarter to approximately US$73 billion, which may cause a slight decline in reserve asset revenue, Arc blockchain-related revenue is expected to offset this impact. Bernstein expects Circle's third-quarter reserve asset revenue to be approximately US$650 million, below US$668 million in the second quarter. However, as revenue related to the Arc token pre-sale is gradually recognized, the company's high-margin other business revenue is expected to increase significantly. The institution expects Circle's third-quarter revenue less distribution costs margin (RLDC margin) to rise from 41% in the second quarter to approximately 44%. From a long-term perspective, Bernstein believes that Circle's growth opportunities come not only from the expansion of USDC circulating supply but also from new revenue sources such as transaction fees, validation services, and staking yields brought by the Arc blockchain ecosystem. The institution expects USDC's average circulating supply to grow from approximately US$76 billion in 2026 to approximately US$150 billion in 2028, driving Circle's revenue to achieve a compound annual growth rate of approximately 39% during 2026 to 2028. Based on higher reserve asset yield assumptions and Arc-related revenue contribution, Bernstein raised Circle's 2026 adjusted EBITDA forecast by 20% to approximately US$720 million, and raised its 2027 and 2028 forecasts by 24% and 17%, respectively, to approximately US$1.1 billion and US$1.6 billion. The institution raised Circle's target price from US$140 to US$145. Bernstein believes that the digital dollar is expected to become important infrastructure for internet payments and settlement systems in the future, and Circle, with its first-mover advantage in USDC, is expected to occupy an important position in this market. Figure's Lending Business Continues to Expand; Tokenized Credit Platform's Growth Potential Viewed Favorably Among the four companies, Figure's growth logic differs from that of traditional cryptocurrency trading platforms. Its core business is using blockchain technology to promote loan origination, financing, and asset trading. Bernstein noted that Figure's third-quarter consumer loan transaction volume reached US$5.1 billion, up 20% quarter-on-quarter and up 107% year-on-year, setting another quarterly high. The institution expects Figure's third-quarter adjusted net revenue to be approximately US$253 million, up 16% quarter-on-quarter; adjusted EBITDA to be approximately US$130 million, up 9% quarter-on-quarter. It is worth noting that after Figure acquired Kiavi, it will consolidate Kiavi's residential transition loan business in its financial statements for the first time in the third quarter. However, Bernstein's current financial forecasts have not yet incorporated Kiavi's contribution. The report noted that Figure is transforming from a traditional loan origination platform into a capital markets service platform. Its Figure Connect business connects loan originators with investors and promotes trading of multiple types of credit assets, including home equity lines of credit, first-lien mortgages, auto loans, and small and medium-sized enterprise loans. Currently, Figure's partner network has exceeded 500. Bernstein expects Figure's full-year loan transaction volume to grow from approximately US$16.8 billion in 2026 to approximately US$24.2 billion in 2028, with a compound annual growth rate of approximately 20%. At the same time, Figure Connect's share of the company's total loan transaction volume is expected to rise from 65% in 2026 to 75% in 2028. Although changes in the business mix may cause Figure's blended fee rate to decline, Bernstein believes that high-margin platform service fee revenue will offset this impact and drive continued improvement in the company's profitability. The institution expects Figure's adjusted EBITDA margin to rise from 53% in 2026 to 61% in 2028, and adjusted EBITDA is expected to reach US$744 million in 2028. Bernstein maintained Figure's "Outperform" rating and US$70 target price, believing that as a platform focused on tokenizing credit assets, it has strong long-term structural growth potential.