💡 CRCL (Circle Internet Group) — Q4 Earnings Tomorrow + USDC Supercycle at 80% Off Highs Creates Classic Value Setup 🚀

DCAChampion
13 hours ago
5 min read

SECTION 1 — Executive Summary 💼

Circle powers the regulated internet financial system as issuer of USDC, the world’s most trusted and attested stablecoin, with growing infrastructure for payments, tokenization, and onchain finance. After an 80%+ post-IPO drawdown, the stock trades at a deep discount to its growth trajectory just as Q4 results (due February 25) and accelerating USDC adoption provide a clear catalyst for re-rating. Overall rating: Buy. 12-month price target: $140 (129% upside from $61.17 close on Feb 23, 2026), derived from 50/50 blend of DCF (conservative USDC growth assumptions) and peer multiples. The single biggest reason to own this stock is its asymmetric risk/reward: dominant regulated stablecoin position with multi-year USDC circulation tailwinds at a fraction of peak valuation. The single biggest risk is interest-rate sensitivity and crypto-market volatility.

SECTION 2 — Business Overview 🏢

Circle operates the leading regulated platform for digital dollars and blockchain-based financial infrastructure, primarily through USDC — a fully reserved, attested stablecoin used for payments, trading, and tokenization worldwide. In plain English: it is the trusted “digital cash” layer bridging traditional finance and crypto.

Revenue breakdown (Q3 2025 ended Sep 30 2025, source: Circle earnings release Nov 12 2025):

- Reserve income (interest on USDC backing): ~90%+

- Transaction fees, SaaS, and payments network: remainder

Geography: Global with heavy U.S. and institutional focus (exact % not publicly broken out in detail).

Business model: Primarily earns interest on the cash/Treasury reserves backing USDC (pass-through yield minus costs) plus growing fee-based revenue from Circle Payments Network, mint/redeem, and enterprise SaaS tools. Repeat revenue is driven by USDC circulation velocity and institutional adoption. Competitive moat: Full regulatory compliance and monthly attestations (unlike Tether), deep partnerships (Visa, BlackRock, Polymarket), and first-mover position in regulated stablecoins and onchain infrastructure.

SECTION 3 — Financial Deep Dive 📈

Key metrics (USD millions except EPS/margins; source: Circle Q3 2025 release Nov 12 2025 and TTM derived; latest available as of Feb 2026):

|---------------|---------|------------|------------|-----|------------------|---------------|------------|

| Q3 2025 (Sep '25) | 740 | +66% | 214 | 0.64 (adj.) | Strong | Strong | Minimal |

| TTM | ~2,411 | +66% avg | Improving | Improving | ~25-30% adj. | Strong | Minimal |

YoY growth remains exceptional, driven by USDC expansion. Balance sheet health: Robust cash position from operations and reserves; essentially debt-free; current ratio strong. Cash flow quality: High-quality, with operating cash flow supporting growth and reserve management. Capital allocation: Heavy investment in product expansion (Arc blockchain, payments network), selective M&A, no dividend yet.

SECTION 4 — Growth Analysis 🚀

Total addressable market (TAM): Global stablecoin and tokenized asset market expanding from ~$250B today to multi-trillions by 2030 (company commentary and industry reports through Feb 2026). Current market share: USDC ~29% of major stablecoins (source: Circle Q3 presentation Nov 2025). Trajectory: Accelerating with institutional and payments adoption. Key growth drivers next 3–5 years: USDC circulation growth, Circle Payments Network scale, tokenization platforms, regulatory tailwinds (MiCA, potential U.S. clarity). Management guidance conservative; analysts more bullish on 2026+ revenue. Growth is organic with network effects.

SECTION 5 — Valuation 📊

DCF analysis (as of Feb 24 2026): 5-year revenue CAGR 35% (taper to 15% terminal, conservative USDC growth), adjusted EBITDA margin expansion to 30%+, WACC 11%, terminal growth 4% → implied fair value ~$135/share[ASSUMPTION: based on consensus stablecoin market forecasts and historical reserve yields]. Comparable company analysis (multiples Feb 23 2026, Yahoo Finance/Bloomberg):

|----------|-------------|------------|---------------|

| CRCL | ~6x | ~5.5x | Stablecoin leader |

| COIN | 8x | 7x | Crypto exchange |

| HOOD | 7x | 6x | Fintech platform |

| SQ | 4x | 3.5x | Payments |

| PYPL | 3x | 2.8x | Digital payments |

Historical valuation range: Post-IPO volatility, but current levels reflect deep discount vs. growth. Bull $250 (USDC >$150B + new revenue streams); Base $140 (consensus); Bear $50 (rate cuts + crypto winter). Current $61.17 offers +129% to base, +309% to bull, -18% to bear.

SECTION 6 — Risk Analysis ⚠️

1. Interest Rate Declines (High prob, High impact): Trigger—Fed cuts; reduces reserve income; watch macro data; could pressure 20-40% of revenue short-term.

2. Crypto Market Volatility / Competition (Med-High prob, Med impact): Tether gains or risk-off; monitor USDC share.

3. Regulatory Changes (Med prob, High impact): Adverse U.S./global rules; watch legislation.

4. Execution on New Products (Med prob, Med impact): Slow payments/tokenization ramp.

5. Valuation Multiple Compression (Med prob, High impact): Any miss.

Short interest moderate (source: Yahoo Finance Feb 2026). Insider activity: Some selling but overall aligned. Accounting quality: Clean, conservative revenue recognition on reserves.

SECTION 7 — Catalyst Calendar 📅

- February 25 2026: Q4 2025 earnings + 2026 outlook (USDC metrics, guidance)

- Ongoing: USDC adoption wins, Circle Payments Network scale, Arc blockchain launch

- H1 2026: Potential regulatory milestones, new partnerships

- Macro: Fed policy, crypto regulation developments

SECTION 8 — Relevant Data & Charts 📊

CRCL 1-year daily chart (TradingView, Feb 2026 view): Sharp post-IPO correction creates compelling entry ahead of earnings — classic value setup with catalyst imminent.

USDC in circulation growth (2024–2025): Explosive 108%+ YoY expansion in Q3 2025 underpins the multi-year revenue runway and thesis.

Quarterly revenue trend (Q1 2024–Q3 2025): Consistent acceleration to $740M demonstrates operating leverage and growth momentum.

Stablecoin market share (Q3 2025): USDC gaining ground vs. competitors — highlights Circle’s competitive positioning.

CRCL recent price action with key levels: Consolidation near lows ahead of Feb 25 earnings sets stage for potential sharp reversal on positive print.

SECTION 9 — Technical Analysis 📈

Primary Chart: Daily, 1-year view (252 trading days). Price at $61.17 sits well below 50-day (~$75) and 200-day (~$120) MAs after heavy post-IPO selling. RSI(14) oversold ~35-40 (room to run); MACD showing early bullish divergence; volume stabilizing. Major support $55–58 zone, resistance $70 then $85. Visible setup: Potential base formation into earnings. Technical implication: Highly constructive for Feb 25 catalyst — beat + strong USDC guidance could ignite 30-50%+ move as shorts cover and value buyers step in.

SECTION 10 — The Verdict 🏆

Bull case ($200, 35% probability): USDC circulation surges + new revenue streams beat → rapid re-rating to growth multiple.

Base case ($140, 50% probability): Solid execution and guidance → steady convergence to intrinsic value.

Bear case ($50, 15% probability): Rate cuts or crypto selloff → further pressure.

Expected value: (0.35×250) + (0.50×140) + (0.15×50) = $157.

Final recommendation: Buy with High conviction.

30-second elevator pitch: “Circle owns the regulated digital dollar infrastructure with explosive USDC growth at an 80% discount to its 2025 highs — tomorrow’s earnings offer the perfect catalyst for value investors to capture asymmetric upside in the internet financial system.”

Sources

- Circle Q3 2025 Earnings Release & Presentation (Nov 12 2025): circle.com/pressroom

- Circle Investor Relations (accessed Feb 24 2026): investor.circle.com

- Yahoo Finance CRCL quote & historical data (Feb 23 2026 close): finance.yahoo.com/quote/CRCL

- TradingView CRCL charts (accessed Feb 24 2026)

- Analyst consensus via Visible Alpha/Bloomberg aggregates (Feb 2026)

- CoinMarketCap / Circle reports on USDC metrics (Q3 2025)

What are your thoughts on CRCL? Drop them below 👇

#CRCL #Circle #USDC #Stablecoin #Earnings #ValueInvesting #Buy #Fintech #CryptoInfrastructure #ChartOfTheDay