Former payments sell side analyst explains why Wall Street keeps getting Coinbase earnings wrong

Episode 7 of Season 6 of The Scoop was recorded with Frank Chaparro, and Ryan Todd.

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In this episode of The Scoop, The Block's podcast, Frank Chaparro is joined by Ryan Todd, a former sell-side equity research analyst who covered the payments sector at Deutsche Bank, to unpack why Wall Street analysts have repeatedly misjudged Coinbase's quarterly earnings.

Todd explains the structural reasons sell-side models tend to underestimate companies like Coinbase, drawing on his own background building and defending earnings forecasts for payments and fintech firms, and he argues that many of the same dynamics that cause analysts to systematically miscall high-growth technology companies apply with particular force to a business as volatile and trading-volume-dependent as Coinbase.

The conversation digs into how Coinbase's revenue is tied closely to crypto trading volumes and asset prices, making it unusually difficult for analysts accustomed to modeling steadier, subscription-like revenue streams to accurately forecast a quarter, and Todd walks through how consensus estimates have swung both too pessimistic and too optimistic at different points in the market cycle. He also discusses the broader challenge of valuing a company that straddles multiple business lines, from retail and institutional trading to custody, staking, and its Base blockchain network, each with different margins and growth trajectories that don't map cleanly onto traditional valuation frameworks.

Todd offers his take on what a more accurate earnings model for Coinbase would need to account for, including seasonality in trading activity, the impact of interest income on stablecoin reserves, and how expense discipline following the 2022 downturn changed the company's operating leverage.

The episode gives listeners an analyst's-eye view of one of crypto's most closely watched public companies, offering context for why Coinbase earnings reports so often produce outsized stock moves and surprised headlines, and why Todd believes the market is still working out how to properly price a business model this exposed to the crypto industry's cyclicality and to swings in bitcoin and broader digital-asset prices. He also weighs in on how comparisons to legacy exchanges and payments processors can mislead investors, since Coinbase's cost structure and regulatory obligations differ meaningfully from either category, and he suggests that better modeling of trading-volume elasticity to price swings would help analysts avoid the repeated earnings surprises that have characterized coverage of the stock since its 2021 direct listing.