Circle Internet Group Valuation: DCF Analysis Suggests Slightly Undervalued Price

Circle Internet Group's stock has rallied 50.6% this year, but its valuation score is only 1 out of 6, indicating it may not be undervalued based on conventional measures. A discounted cash flow analysis estimates the company's intrinsic value at $137.14 per share, which is 8.6% above its current price, suggesting the share price is close to fair value with a slight tilt toward being undervalued.

Circle Internet Group's (CRCL) stock has experienced a significant 50.6% rally this year, but its valuation score remains low, indicating potential overvaluation based on conventional measures. The company's stock has underperformed its peers, including Coinbase (COIN), PayPal (PYPL), and Robinhood (HOOD), over the past 30 days, with CRCL shares dropping 30.3% compared to an industry decline of 1.7% and a sector rise of 1.3% Circle Drops 30% in a Month: Should You Still Hold the CRCL Shares?^[1].

The underperformance can be attributed to increasing competition from established players like Coinbase, PayPal, and Robinhood. Coinbase has partnered with Shopify to enable onchain payments using USDC on its Ethereum layer-2 network, while PayPal offers PayPal USD (PYUSD) and Robinhood has launched a stablecoin called USDG. Despite these challenges, CRCL's stablecoin network, USDC, has shown robust growth, with a 90% year-over-year increase in circulation to $61.3 billion by the end of the second quarter of 2025 Circle Drops 30% in a Month: Should You Still Hold the CRCL Shares?^[1].

The growing adoption of USDC and an improving regulatory environment, including the passage of the GENIUS Act, have driven Circle's revenues and reserve income by 53% year over year to $658.1 million. The company's top line beat the Zacks Consensus Estimate by 1.97% Circle Drops 30% in a Month: Should You Still Hold the CRCL Shares?^[1].

However, CRCL's stock remains a risky bet in the near term due to its stretched valuation and stiff competition. The company's investments in platform expansion and partnerships are expected to hike operating expenses, currently estimated between $475 million and $490 million for 2025, implying a 20-24% growth rate. This is expected to keep margins under pressure in the near term Circle Drops 30% in a Month: Should You Still Hold the CRCL Shares?^[1].

The strategic collaboration between Fireblocks and Circle Internet Group is a significant moment for the stablecoin ecosystem. The collaboration aims to make it easier and safer for financial institutions to build digital asset offerings by integrating Circle's stablecoin network with Fireblocks' custody and payments infrastructure. This partnership can provide financial institutions with the infrastructure to meet the challenges of launching new stablecoin-based products while meeting security and compliance requirements Fireblocks and Circle Internet Group, Inc. Strategically Collaborate to Accelerate Stablecoin Adoption for Financial Institutions^[2].

Analysts have provided varied ratings for CRCL stock. Oppenheimer has assigned a "market perform" rating, while Deutsche Bank has reduced its target price and set a "hold" rating. Sanford C. Bernstein has issued an "outperform" rating with a $230.00 price objective, and Citigroup has initiated coverage with an "outperform" rating Oppenheimer Initiates Coverage on Circle Internet Group (NYSE:CRCL)^[3].

A discounted cash flow analysis estimates CRCL's intrinsic value at $137.14 per share, which is 8.6% above its current price, suggesting the share price is close to fair value with a slight tilt toward being undervalued. However, the company's Zacks Rank #3 (Hold) indicates that investors should wait for a better entry point to accumulate the stock Circle Drops 30% in a Month: Should You Still Hold the CRCL Shares?^[1].