Mizuho Flags $115 Downside For Circle Stock Over USDC Risks

- Mizuho Securities assigns "underperform" rating to Circle (CRCL) with an $85 price target. - Stagnant USDC supply, lower revenue forecasts, and rising competition cited as key risks. On July 8, 2025, Mizuho Securities issued a bearish analysis of Circle's stock (CRCL), sparking investor scrutiny. Although the stock climbed remarkably from its $31 IPO to a peak of $204, Mizuho assigned it an "underperform" rating with a price target of $85. The report flagged significant risks to Circle's medium-term growth, focusing on its core business and the USDC stablecoin. Mizuho highlighted that USDC's supply has stagnated at $62 billion since April 2025, which signals sluggish adoption. Analysts also project Circle's 2027 revenue will fall 25% to 30% below the consensus estimate of $4.5 billion. The firm added that potential interest rate cuts could weaken Circle’s net interest income and compound these challenges. Profitability presents another pain point. Rising distribution costs, particularly USDC-related payouts to partners like Coinbase, have squeezed Circle’s margins. The report noted that profit margins fell sharply from 61% in 2023 to 39% by early 2025. Meanwhile, Circle faces intensifying competition in the stablecoin market. Regulatory shifts, such as the GENIUS Act, may ease market entry for competitors. Emerging players like PayPal and Ripple have already launched stablecoins that could challenge USDC's dominance. However, not all analysts share Mizuho’s pessimism. Bernstein recently projected Circle’s stock could reach $230, calling the company the "internet dollar network for the next decade." In response, Mizuho's Dan Dolev countered these bullish forecasts. He cited a more realistic 2027 revenue estimate of $3.3 billion, which accounts for modest USDC growth and reduced borrowing costs. The overall sentiment among financial institutions remains cautious, with most leaning toward a "Hold" rating. Current price targets suggest limited upside and, in some cases, substantial downside from today's valuation. According to market data on July 8, at 18:08 UTC, USDC was trading at $1. Its 24-hour trading volume showed a slight 0.013% increase.