Needham’s top analyst, John Todaro, initiated coverage on Circle Internet (CRCL) stock with a Buy rating, setting a new Street-high price target of $250, implying 38.6% potential upside. Todaro highlighted stablecoins as a rapidly expanding and transformative segment of the financial ecosystem. The five-star analyst expects a period of accelerated adoption of stablecoins both in the U.S. and globally. Considering Circle jointly launched the USDC stablecoin with Coinbase Global (COIN), the company is poised to be one of the biggest beneficiaries of this revolution.
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Todaro also views the passing of the GENIUS Act as a key catalyst for the global adoption and broader issuance of stablecoins. He noted that Circle is the issuer of the world’s second-largest stablecoin and is among the most compliant under U.S. regulations, putting less compliant, large rivals at a disadvantage. Todaro predicts a 50% CAGR (compound annual growth rate) for USDC through 2028.
Why Is Needham Highly Bullish on Circle Stock?
Todaro identifies five key factors behind his bullish outlook on Circle stock. Here’s a look at each.
- USDC serves as the dominant “reserve asset” in DeFi (Decentralized Financing), supporting consistent customer demand of $12 billion.
- USDC is expected to take a material share of the market from USDT (Tether) in 2026 and 2027 once the GENIUS Act becomes law, which will benefit Circle.
- International adoption of stablecoins linked to the U.S. dollar will act as a catalyst for higher use and influence of the U.S. dollar.
- There is significant upside potential in payments and remittances made using USDC, as evidenced by higher USDC transaction volumes and larger dollar amounts per transaction.
- Circle has high operating leverage, as many of its costs are fixed. As a result, margins are expected to grow at a faster pace than expenses.
Overall, the analyst believes that Circle deserves a premium valuation, similar to Tesla (TSLA) or a leading artificial intelligence (AI) company. Todaro stated that Circle’s use cases encompass a broad range of activities, including DeFi, payments, institutional settlement, and global remittances, which together make up more than $60 billion of USDC’s market capitalization. As a result, Circle is poised to earn high-margin interest income from these activities.
To conclude, the analyst believes that Circle is set to capture a disproportionately large market share of stablecoin growth over the next five years, further supporting his bullish stance on the stock.
Notably, Todaro ranks #124 out of the 9,653 analysts covered on TipRanks. He boasts a success rate of 67% and an average return per rating of 37.80%.
Is Circle Stock a Good Investment?
On TipRanks, CRCL stock has a Moderate Buy consensus rating based on one Buy and two Hold ratings. Also, the average Circle Internet price target of $213.33 implies 18.2% upside potential from current levels.
