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Investing.com - Compass Point lowered its price target on Circle Internet Group (NYSE:CRCL) to $96.00 from $130.00 on Monday, while maintaining a Sell rating on the stock. The company’s shares, currently trading at $114.56, have declined 13.2% in the past week, though they’re still up nearly 38% over the past six months. According to InvestingPro data, analyst targets for the stock range from $84 to $280.
The price target reduction follows Hyperliquid’s September 5 announcement of plans to launch its own stablecoin called USDH. Hyperliquid currently holds $5.4 billion in USDC deposits, representing approximately 8% of the total USDC supply.
Hyperliquid developers are considering partnering with a stablecoin issuer such as Paxos to white-label a stablecoin that complies with the GENIUS act. The platform plans to incentivize users to convert their USDC holdings into USDH by sharing interest income with USDH holders.
Compass Point views this development as a negative catalyst for both Circle Internet Group and Coinbase (NASDAQ:COIN), as each company currently earns 50% of interest income from USDC held on Hyperliquid.
The research firm expects Hyperliquid users to convert a majority of USDC into USDH, potentially creating a $100 million headwind to Circle Internet Group’s gross profit, leading to reduced 2026 earnings forecasts and the approximately 28% reduction in price target. Despite current challenges, analysts expect the company to achieve profitability this year. Get deeper insights and access to comprehensive financial analysis with a InvestingPro subscription, which includes 14 additional ProTips and detailed valuation metrics for CRCL.
In other recent news, Circle Internet Group reported its first earnings as a public company, revealing a GAAP loss of $4.48 per share for the second quarter of 2025. This loss was largely attributed to IPO-related stock-based compensation and the fair value marking of convertible securities. Despite this, Needham reiterated its Buy rating on Circle Internet Group, setting a price target of $250, after noting stronger-than-expected quarterly results with USDC on platform and revenue from subscriptions and services surpassing estimates. Meanwhile, JPMorgan raised its price target for Circle to $89, citing platform growth, although it maintained an Underweight rating.
Circle has also announced a strategic partnership with a subsidiary of Circle Internet Group to integrate USDC settlement into cross-border payment flows, enhancing its Global PAYplus platform. Additionally, Circle has acquired Malachite, a consensus engine from Informal Systems, to support its upcoming Arc blockchain network. The network, designed for stablecoin finance, is expected to launch in testnet later this year. Furthermore, Circle priced its public offering at $130 per share, offering 2 million shares of Class A common stock, with an additional 8 million shares from selling stockholders and an option for underwriters to purchase up to 1.5 million more shares.
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