Coinbase (COIN) is heading into its Q1 earnings report on shaky ground, with four Wall Street analysts expecting a miss

The company is scheduled to report first-quarter results on Thursday post-market. The analysts are projecting earnings per share (EPS) falling to $1.93 from $2.26 in the fourth quarter and revenue dropping to $2.00 output: Coinbase (COIN) is heading into its Q1 earnings report on shaky ground, with four Wall Street analysts expecting a miss

Coinbase (NASDAQ:COIN) is heading into its first-quarter earnings report on Thursday on shaky ground, with four Wall Street analysts already projecting a miss as the retail trading lull is likely to pressure the crypto exchange’s most profitable business lines.

The company is scheduled to report first-quarter results on Thursday after the market close. The analysts are projecting earnings per share (EPS) falling to $1.93 from $2.26 in the fourth quarter and revenue dropping to $2.1 billion from $2.27 billion, according to FactSet data.

In the year-earlier first quarter, it reported EPS of $4.40 and revenue of $1.2 billion. Trading volume is expected to land around the $403.8 billion mark vs. $439 billion in the fourth quarter.

J.P. Morgan cut its EPS estimate to $1.59, citing a 10% drop in Coinbase's trading volume and a 17% slide in total crypto market cap during the quarter. Adjusted for crypto asset losses, they see EPS at $2.39, supported in part by controlled expenses and stable subscription revenue.

But even the usually bullish Barclays and Compass Point see deeper trouble. Barclays slashed its revenue and EBITDA forecasts, saying the market has cooled sharply since January despite stablecoin growth. It pegs retail volumes at $69 billion, significantly lower than the Street's mean estimate of $79.8 billion.

More bearishly, Compass Point downgraded the stock to sell, projecting transaction revenue of $1.24 billion, or 7% lower than the consensus. It argues that Coinbase is losing retail share to decentralized exchanges (DEXs) and warns of further pain in the second quarter.

Popular trading platform Robinhood (NASDAQ:HOOD), last week, reported a 13% drop in transaction-based revenue from the fourth quarter as markets cooled in the first three months of the year.

Stablecoins to the rescue?

The one area of optimism: stablecoins.

Coinbase's revenue from USDC surged as the stablecoin's market cap climbed 42% during the quarter, helping bolster subscription revenue. Barclays estimates $304 million in first-quarter USDC-related revenue, and even the skeptics at Compass Point acknowledge this helped offset falling staking income due to the slide in ether's price.

Oppenheimer cut its volume forecast to $380 billion from $440 billion, but noted that Coinbase gained U.S. spot trading market share. That's a positive sign, but one that may not matter if retail traders keep sitting on their hands.

There's also growing concern about longer-term competitive pressures. Analysts noted that decentralized exchanges — especially those operating on faster and cheaper blockchains like Solana and Coinbase's own Base — are drawing in retail users looking to trade a wider variety of tokens. While Coinbase's U.S. market share is up, its dominance as a centralized, regulated exchange may not be enough to fend off this shift.

Looking ahead, analysts caution that a near-term rebound in trading may be slow to materialize, especially with retail traders often preferring to wait until they can recoup earlier losses before re-entering the market.

Shares of Coinbase are down 23% year-to-date, and trade at $198.06, while bitcoin is up 3.8% since the beginning of the year.