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Investing.com - William Blair maintained its Outperform rating on Circle Internet Group (NYSE:CRCL) following the company’s third-quarter results that exceeded expectations across all metrics. With a market capitalization of $22.75 billion, Circle currently has an analyst consensus recommendation of 2.44 according to InvestingPro data, aligning with William Blair’s positive stance.
Circle reported third-quarter revenue, Reserve Liability Derived Cash (RLDC), and EBITDA approximately 5%, 12%, and 24% above analyst estimates, respectively. The outperformance was primarily driven by reserve return rates coming in 13 basis points higher than anticipated. This positive momentum comes despite Circle’s trailing twelve-month EBITDA of -$160.33 million and gross profit margin of just 4.12%.
The company raised its 2025 transaction revenue guidance to $90 million-$100 million, up from its previous outlook of $75 million-$85 million. Circle also tightened its RLDC margin expectations to 38% from the previous range of 36%-38%, which William Blair attributes to a higher mix of on-platform USDC stablecoin. InvestingPro highlights that four analysts have revised their earnings upwards for the upcoming period, supporting the improved guidance.
Circle’s transaction processing volume (TPV) showed significant growth, reaching $3.4 billion annualized, representing 101x growth on a trailing-12-month basis. The company now has 100 participants in its proprietary L-1 blockchain, Arc, and plans a mainnet launch in 2026. This growth trajectory is reflected in Circle’s annual revenue of $2.12 billion, though investors should note the stock trades at a high Price/Book multiple of 9.6.
William Blair maintains its view that USDC will become "the stablecoin standard" over the next several years, putting Circle "at the center of the programmable money revolution," and recommends investors "add on weakness" despite the stock’s current premium valuation. InvestingPro’s Fair Value assessment suggests Circle is slightly undervalued at current levels, potentially supporting William Blair’s "add on weakness" recommendation. Discover comprehensive analysis in Circle’s Pro Research Report, available with over 1,400 other top stocks on InvestingPro.
In other recent news, Circle Internet Group has been the focus of several analyst evaluations and strategic developments. Monness, Crespi, Hardt initiated coverage on Circle Internet Group with a Buy rating, setting a price target of $150, citing the company’s potential to significantly impact the stablecoin market. Meanwhile, Compass Point lowered its price target to $92 while maintaining a Sell rating, anticipating Circle’s third-quarter adjusted EBITDA to exceed consensus forecasts by 8%. Tiger Securities also adjusted its price target to $140, maintaining a Hold rating due to lower projected reserve income, despite a notable increase in USDC circulation.
Clear Street initiated coverage with a Hold rating and a price target of $135, basing its valuation on future earnings projections. Additionally, Circle Internet Group announced a strategic partnership with Safe, aiming to enhance USDC self-custody solutions. This collaboration seeks to establish Safe as a leading institutional storage solution for USDC, with $2.5 billion in USDC currently held in Safe smart accounts. These developments reflect Circle’s ongoing efforts to strengthen its position in the stablecoin and decentralized finance markets.
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