Circle Internet Group Inc. (NYSE:CRCL) will report earnings for the second quarter before the opening bell on Wednesday. Here is a pre-earnings look at the stablecoin issuer and its stock.
Will Circle Beat Earnings Again?
Analysts estimate Circle to report earnings per share of $0.19, compared to a loss of $0.43 in the same quarter last year.
The issuer of the world’s second-largest stablecoin by market capitalization, USDC (CRYPTO: USDC), is also expected to report revenue of $734.70 million, up 11% year-over-year, and up nearly 6% from the previous quarter.
Notably, Circle exceeded earnings expectations in the first quarter but fell short of revenue estimates.
Is the Market Underestimating CRCL?
The CRCL stock currently carries a consensus “Buy” rating, with 21 analysts converging on an average price target of $120, implying about 99% upside from current levels.
On Monday, TD Cowen launched coverage on the stock with a “Buy” rating and set an $82 price target
Analyst Bryan Bergin saw in Circle a “compelling combination” of attractive growth and diversification via USDC circulation, and rapidly growing high-margin fee-based revenues.
Bullish Speculation or Bearish Fears?
Short interest in the stock has risen to 27.11 million shares, representing 12% of Circle’s publicly available float. A rising short interest is typically interpreted as a bearish signal.
That said, traders were buying significantly more call options than put options, according to the put-call ratio, indicating strong bullish speculation.
The Bull Bear Power Indicator, which measures the strength of buyers and sellers, was "Neutral," according to TradingView.
Circle’s primary source of revenue is interest income earned on the reserves—mostly in short-term U.S. Treasuries and cash— backing its USDC stablecoin.
USDC in circulation fell 4.6% in the second quarter to $73.77 billion, according to DeFiLlama.
Price Action: Circle shares were up 0.03% in overnight trading after closing 3.61% lower at $60.35 during Monday’s regular trading session. Year-to-date, the stock has plunged nearly 24%.
Benzinga’s Edge Stock Rankings indicate that the CRCL stock has underperformed with a weaker price trend across short-, medium-, and long-term timeframes.
Photo: bella1105 / Shutterstock
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