Recently listed Circle Financial (CRCL) is slowly gaining a reputation of being the Nvidia (NVDA) of the crypto industry. The hype around the USDC stablecoin issuer is real. Since its listing, the share price has rallied by more than 500%, thanks in no small part to the GENIUS Act.
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The GENIUS Act or “Guardrails for Emerging and Novel Instruments Utilizing Stablecoins” Act is a U.S. is a federal law passed in July 2025 to regulate stablecoins like USDC and USDT, which is issued by Tether. Under this act, only federally approved and well-capitalized institutions (like banks or regulated fintechs) can issue stablecoins and the issuers must hold one-for-one dollar-equivalent reserves, mostly in cash or short-term Treasurys.
Acting as a further tailwind and a regulatory stamp of approval for stablecoins, this makes the case for investing in CRCL stock even more compelling. However, the stock’s massive uptick has led to valuation concerns.
Goldman Sachs has a price target of $83 for the stock, implying a 57% decline from current levels while stating that they “view CRCL’s business and growth attractively, but valuation appears elevated.” Meanwhile, analysts at Oppenheimer, without providing a price target, commented that they had a “very favorable view” of Circle and its business. However, citing its punchy valuations, advised that “investors wait for a better entry point.”
Interestingly, JPMorgan, which has also been making moves in the stablecoin space, has issued an “Underweight” rating on the CRCL stock with a price target of $80. Their concerns were also along similar lines.
So, what is to be done with Circle now? Let’s have a closer look.
In a recent piece, I outlined the bull and bear cases for Circle here.
Essentially, Circle functions as a key infrastructure provider in the evolving digital finance ecosystem, rather than as a traditional financial institution. Instead of handling fiat transactions directly, it relies on regulated banking partners to move funds. Thus, Circle’s core responsibilities remain focused on issuing digital dollars and settling them securely.
This allows Circle to operate with flexibility, while reducing its exposure to banking-specific regulatory burdens. Consequently, the company is positioned as a bridge between the traditional financial system and the blockchain-based future.
Meanwhile, in recent developments, Circle has begun to expand beyond just stablecoin issuance. The acquisition of Hashnote earlier this year led to the launch of USYC, a tokenized version of a U.S. Treasury money market fund. This step marks the company’s entry into the broader tokenized asset space, an industry with significant long-term potential.
However, regulatory shifts are shaping the company’s options. The GENIUS Act, though supportive of stablecoin frameworks, imposes strict guidelines on reserve composition, limiting it to cash, demand deposits, or short-term Treasuries. This restricts the types of assets Circle can hold, reducing flexibility around yield generation and risk management.
Another factor to consider is Circle’s revenue-sharing agreement with Coinbase (COIN). While it has been instrumental in growing USDC’s reach, the arrangement introduces recurring costs. Notably, every new distribution partner adds to Circle’s payout obligations, which could weigh on future profitability.
Finally, valuation remains an area of concern. Circle trades at a forward price-earnings ratio of of 154x and a price-to-sales ratio of 23.8x. This is far above the industry averages of 23.97x and 3.17x, respectively. These elevated multiples suggest that much of the company’s long-term growth is already priced in, leaving little room for missteps.
Circle’s financial story over the past couple of years tells a striking tale of change. Back in 2022, it was still in the red, bringing in $772 million in revenue but ending the year with a sizable net loss of $768.8 million. Things have turned around since then. By the close of 2024, revenue had surged to $1.7 billion, and the company now reported a profit of $155.7 million.
Cash flow followed a similar path. In 2022, there was negative cash flow from operations of $72.7 million. Two years later, the company was generating cash flow from operations of $344.6 million instead.
Meanwhile, Circle’s cash reserves have also grown stronger. From around $369 million at the end of 2023, the company’s cash position nearly doubled to $751 million by the end of 2024. In a space as unpredictable as crypto, that kind of liquidity offers real flexibility.
Overall, analysts have attributed a rating of “Moderate Buy” for CRCL stock with a mean target price of $184.67 which has already been surpassed. The high target price of $280 indicates upside potential of about 50% from current levels.
Out of 14 analysts covering the stock, six have a “Strong Buy” rating, one has a “Mdoerate Buy” rating, four have a “Hold” rating, and three have a “Strong Sell” rating.
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On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
