Mizuho cuts Gemini Space Station stock price target on trading pressure

Mizuho has lowered its price target for Gemini Space Station (GEMI) stock to $7.00 from $8.00, maintaining an Outperform rating. The company's shares are currently trading at $3.92, near its 52-week low of $3.74. Mizuho attributed the downgrade to pressure on the company's trading engine during the second quarter, with total volume falling 40% quarter-over-quarter and exchange revenue declining 27%.

Monthly transacting users dropped to 580,000, and card transaction losses increased to $20 million, with a $16 million provision tied to a first-quarter fraud cohort driving 30-plus day delinquencies to 9.4%. While the company remains unprofitable with a negative 27% gross profit margin over the past year, services and interest income rose 117% year-over-year to approximately 59% of net revenue.

Gemini's operating expenses fell 15% quarter-over-quarter, and its Gemini Predictions set monthly volume records. The analyst sees the business broadening and costs declining, suggesting the stock is undervalued among the platform's most undervalued stocks. Despite recent financial challenges, including a loss in the second quarter of 2026 with an adjusted EPS of -$0.89, revenue grew 37% YoY to $45.5 million, driven by increased services revenue, interest income, and OTC activity.

The company's financial performance was hurt by higher credit provisions, mark-to-market losses on Bitcoin holdings, and decreased trading activity.