Key Takeaways
- Circle Internet Group stock has fallen 50% from its March high, but Monness reiterated its Buy rating and $175 price target on Nov. 12, 161% above the latest close.
- Lower rates cut Circle’s third-quarter reserve income 8%, USDC in circulation was flat over the year, and management expects a lower margin in the fourth quarter.
- Analysts’ average target is down to $102 from $167 a year ago, and their earnings estimates for 2027 and 2028 have fallen sharply since June.
- Monness’s target works out to about 159x forward earnings, a higher multiple than Circle has traded at in the past year, so the call looks too optimistic.
Circle Internet Group (CRCL) has lost 50% of its value since its March high, and Monness hasn’t budged. Analyst Gustavo Gala reiterated the firm’s Buy rating on Nov. 12, with a $175 price target that sits 161% above the stock’s latest close.
Monness also had a $175 target in late September. Most of Wall Street has cut its targets since then.
Rates, flat balances and a bigger Binance bill
With its second-quarter results, Circle cut its 2026 outlook for other revenue, excluding the Arc token presale, to $130 million to $150 million. In February it had guided to $150 million to $170 million.
Circle reported its third quarter on Nov. 4. Revenue and reserve income rose 17% to $865 million, but $182 million of that came from the ARC token presale. Reserve income fell 8% to $658 million as the return on USDC’s reserves dropped 61 basis points to 3.5%. And USDC in circulation ended September at $73.9 billion, flat from a year earlier.
The fourth quarter looks tougher still. On the call, CFO Jeremy Fox-Geen pointed analysts to a lower margin: “the step down that we anticipate in Q4 due to the full quarter of the Binance incentive arrangement being recognized.”
TIKR tracks 29 analysts on Circle Internet Group. How many say “Buy”?
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Monness is betting on the network
When Monness initiated coverage at $150 last November, its case was that Circle could bring “a meaningful, long-run chunk of M2 on chain.” The third quarter gave that case some support. Circle’s payments network reached $41.3 billion of annualized volume. Fox-Geen also said the company expects “material revenue” from the network in 2027, once its Tazapay acquisition closes.
What would $175 take?
Wall Street’s average target has fallen to $102 from $167 a year earlier, though that’s still 53% above the stock price. Targets from the analysts covering Circle range from $34 to $243. Needham, which saw 48% upside in October, cut its target to $103 from $134 after the report.
The earnings estimates behind those targets have fallen harder. In June, analysts expected normalized EPS of $2.22 for 2027 and $3.07 for 2028. Now the estimates are $1.42 and $1.80, both below the $2.35 Circle earned in 2025.
Circle trades at 61x forward earnings. That’s below its one-year average of 72x and well off its 118x peak in March.
Monness’s $175 works out to about 159x, a multiple Circle hasn’t reached in the past year.
Monness is asking for a lot
Rates are the biggest risk. Most of Circle’s revenue is still reserve income, and reserve income shrinks as short-term rates fall.
Monness’s call looks too optimistic to me. Circle’s estimates are still falling, and at $175 investors would be paying more for those earnings than they did at the March peak. I’d want to see the estimates stop falling before counting on even the Street’s $102.
The next test is the fourth-quarter report, likely in late February. It should bring Circle’s first 2027 outlook and a clearer view of how much of the network’s volume turns into fees.
So what is Circle Internet Group stock actually worth?
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