Wolfe Research has reduced its price target for Circle Internet Group (NYSE:CRCL) to $40.00 from $65.00 and left its rating at Underperform. The newly assigned target equates to roughly a 31% downside from the stock's most recent trading price of $57.86 and follows a notable reassessment of the company’s future earnings potential.
The update represents a 38.5% cut to Wolfe Research’s prior valuation benchmark for the digital payments and stablecoin issuer. The change comes against the backdrop of a broader negative drift in CRCL shares, which InvestingPro data shows have slid 64.55% over the past six months.
Wolfe Research analyst Daniel Krebs pointed to a "material lower out-year profitability estimate with similar opex growth assumptions" compared with the firm’s earlier model as the principal reason for the reduction in target. That assessment is consistent with InvestingPro metrics showing the company is not profitable on an EBITDA basis, reporting -$142.93 million for the last twelve months, and operating with weak gross profit margins of 5.28%.
The revised price target is derived from applying a 19x multiple to Wolfe Research’s 2027 EBITDA estimate of $634 million. That EBITDA forecast and multiple are both lower than in the prior model, which used a 21.5x multiple on a 2027 EBITDA estimate of $865 million.
Despite the downward move, Wolfe Research noted that the 19x multiple still sits at a premium relative to peers, which the firm describes as trading at roughly 13-19x.
Other recent analyst activity around Circle shows a range of views. Morgan Stanley started coverage with an Equalweight rating and a $66.00 price target. Compass Point upgraded the shares from Sell to Neutral while trimming its target from $75.00 to $60.00. Mizuho moved the stock from Underperform to Neutral and assigned a $77.00 price target.
Separately, regulatory developments are also in play. The White House plans a meeting with banking and cryptocurrency industry executives to discuss stalled crypto legislation, a session that bears on the rules governing how crypto firms pay interest and rewards on stablecoin holdings. Circle is the issuer of USDC, the second-largest stablecoin, which currently holds about $70 billion in value, a fact that helps explain the company’s heightened exposure to regulatory discussions.
Taken together, the analyst revisions, company financials and policy attention underscore the scrutiny surrounding Circle Internet Group in both capital markets and regulatory circles. Investors and market watchers are watching valuation multiples, future EBITDA expectations and the regulatory environment for stablecoins for signals about the company's trajectory.