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Investing.com - Compass Point downgraded Circle Internet Group (NYSE:CRCL) to Sell from Neutral and lowered its price target to $77 from $79. The target implies roughly 18% downside from the current stock price of $94.44, with InvestingPro data suggesting the stock is overvalued based on its Fair Value analysis.
The firm said it expects gross margins to contract in the first half of 2026. Compass Point said USDC supply is shifting into lower margin areas despite showing resilience this cycle. The margin pressure is already evident, with Circle’s gross profit margin standing at just 8.67% over the last twelve months—a weakness highlighted among InvestingPro Tips available for the stock.
The analyst firm said Circle Internet’s outperformance since fourth-quarter results was driven by USDC’s resilience and growing expectations for margin expansion. The stock trades at 40 times optimistic 2027 EBITDA forecasts that assume USDC reaccelerating by the second quarter of 2026.
Compass Point expects consensus estimates to decline as USDC supply remains stagnant and the company’s first-half 2026 margins fall. The firm’s 2027 EBITDA estimate sits 20% below the Street.
Circle Internet Group operates a digital currency platform centered on its USDC stablecoin. The stock has declined 37% over the past six months despite revenue growth of nearly 64%. For deeper insights into CRCL’s valuation and financial health, investors can access the comprehensive Pro Research Report, available for this and 1,400+ other US equities.
In other recent news, Circle Internet Group launched the Circle Payments Network Managed Payments service. This stablecoin settlement solution allows banks and other enterprises to use USDC for transactions without directly managing digital assets. Additionally, Triple-A has joined the Circle Payments Network to enhance stablecoin-to-local currency settlements, enabling cross-border payouts for various financial activities. Meanwhile, Baird has reiterated its Outperform rating for Circle Internet Group, setting a price target of $138.00. Morgan Stanley also maintained an Equalweight rating with an $80.00 price target, citing regulatory concerns related to stablecoin legislation. In a separate development, EDX Markets, backed by Citadel Securities, applied for a national trust bank charter with the Office of the Comptroller of the Currency. This application is under the regulatory framework established during the Trump administration, which is considered more favorable to the cryptocurrency industry. These developments reflect ongoing changes and strategic moves within the financial and cryptocurrency sectors.
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