Investment bank Mizuho has launched coverage of Circle Internet Group with an Underperform rating and a $85 price target for its shares, pointing to rising costs and interest rates as key concerns. Circle, one of the few companies to have gone public in 2025, has seen its stock surge 149% since its June listing. However, major investment banks, including Mizuho, have expressed skepticism about its current market valuation, particularly given the 21% decline in its stock price since reaching its peak in late June.
Circle is primarily known for its stablecoin, USDC, which has drawn significant retail investor attention.
This surge in interest is partly driven by growing concerns over the U.S. fiscal health, government spending, and deficits. Despite the optimistic retail interest, Mizuho is cautioning against overvaluation, noting that the market is pricing in unrealistically high growth potential for USDC.
Mizuho’s concerns are rooted in the consensus FY27 revenue estimate of $4.5 billion, which they believe fails to account for the possibility of interest rate cuts and overestimates USDC’s medium-term growth. The Underperform rating aligns with similar perspectives from other investment giants, such as Goldman Sachs and JPMorgan, who have all pegged the stock at relatively low price targets of around $80 to $85.
Additionally, Mizuho is cautious about Circle’s revenue-sharing agreement with Coinbase. Circle distributes USDC but shares 50% of its revenue with Coinbase, which also helped develop the stablecoin. This revenue-sharing structure significantly impacts Circle’s bottom line, as shown by the $1 billion Circle paid out of its $1.7 billion revenue in distribution costs last year, with over 90% of this sum going to Coinbase.
In light of these factors, Mizuho has lowered its revenue estimates for Circle, suggesting a more realistic FY27 target of $3.3 billion, assuming more modest USDC circulation growth and lower interest rates. The bank believes that this valuation better reflects the company’s potential and the current market environment, urging investors to reconsider the inflated expectations surrounding Circle’s stock.