Analysts warn that declining rates, stagnant USDC growth, and rising distribution costs could weigh heavily on Circle’s earnings outlook
Circle Internet Group’s stock has come under renewed scrutiny as Mizuho Securities lowered its price target to $70, reaffirming an “underperform” rating amid growing concerns about the company’s earnings prospects. Shares of Circle (CRCL), which were trading near $82, have slid almost 40% in the past month, reflecting increasing market skepticism following its volatile post-IPO performance.
Why Mizuho Is Growing More Bearish
In its latest research note, Mizuho raised doubts about whether Circle’s current valuation reflects the risks ahead. The firm highlighted three major concerns:
- Potential interest rate cuts that could weaken Circle’s yield-related revenues
- Relatively stagnant USDC circulation, reducing growth expectations
- Structurally high and rising distribution costs as competition among stablecoins intensifies
“We do not believe CRCL’s valuation appropriately reflects key risks to earnings over the medium term,” analysts wrote, emphasizing that increased pressure from rival stablecoin issuers may further strain Circle’s financial performance.
USDC Faces Tougher Competition
USDC remains the second-largest stablecoin globally by supply, trailing Tether’s USDT. However, its sluggish circulation growth has become a focal point for analysts questioning whether the asset can regain momentum.
One market strategist noted that Circle’s costs of distributing USDC have continued to rise, creating a structural challenge as the stablecoin landscape becomes more crowded.
Circle went public in June in one of the year’s most anticipated IPOs. The stock surged more than 200% on its first trading day, climbing above $90, and later touched around $250 at its peak.
But the recent selloff underscores ongoing uncertainty about Circle’s long-term trajectory.
Analyst Views Diverge Sharply
Mizuho’s revised price target stands in stark contrast with JPMorgan’s outlook. Earlier this week, JPMorgan upgraded Circle to “overweight,” projecting a $100 price target by December 2026—a bullish call that suggests confidence in the company’s ability to sustain stablecoin growth despite macro pressures.
Still, Mizuho warns that consensus estimates may face downward revisions. “CRCL is likely to see reduced expectations as rates decline, USDC adoption grows slower than anticipated, and distribution expenses continue rising,” its analysts stated.
With a bull-case target of $251 and a bear-case scenario of $38, Circle’s stock remains one of the most polarizing names in the digital-assets sector—highlighting just how uncertain the stablecoin race has become.
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