Latest news with #EdEngel
Yahoo
a day ago
- Business
- Yahoo
Circle Internet Group stock falls after first downgrade
-- Circle Internet Group (NYSE:CRCL) stock declined over 3% Tuesday after receiving its first downgrade since its June IPO, with shares that initially priced at $31 now trading above $200. Compass Point analyst Ed Engel downgraded CRCL from Neutral to Sell with a price target of $130, down from $205, citing concerns about the company's long-term economics relative to its $53 billion valuation. The downgrade comes after U.S. stablecoin legislation passed last week. "We still believe USDC can be an integral part of the financial system; however, we're more cautious towards CRCL's long-term economics than its $53bn valuation implies," Engel wrote in his note to investors. The analyst expects Circle to expand its distribution network in coming months while sharing a greater percentage of interest income. He also anticipates traditional banks and fintech companies will announce competing stablecoin products in the second half of 2025, potentially pressuring CRCL's premium valuation. According to Engel, CRCL's current market capitalization implies expectations of approximately 25% market share and 30% EBITDA margins long-term. His reduced price target assumes 15% long-term market share and 20% EBITDA margins, representing a 60x multiple on 2026 estimated EBITDA versus the current 106x. The analyst also pointed to crypto's history of "sell the news" events, suggesting CRCL may retrace some of its recent rally following the GENIUS Act being signed into law on July 18. At least three analysts now rate the stock as a sell, including JP Morgan, which maintains an $80 price target on CRCL. Related articles Circle Internet Group stock falls after first downgrade Clients buying into summer rally, bracing for later pullback, says BofA's Hartnett After soaring 149%, this stock is back in our AI's favor - & already +25% in July Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Wall Street analyst has a blunt warning on surging stock
Wall Street analyst has a blunt warning on surging stock originally appeared on TheStreet. Circle (CRCL), the public issuer of stablecoin USDC, saw its shares shrink as much as 8% on July 22, after Compass Point downgraded the stock from "Hold" to "Sell," citing valuation concerns and increased competition in the digital asset market. The firm also reduced its price target on Circle to $130, down from $205, which suggested a pullback after the company's huge post-IPO run. At press time, CRCL was trading at $199.24, down 7.80% over the last day. Circle stock has increased over 500% since launching on June 5, and Growth has been fueled by the energized market environment spawned by the introduction of the GENIUS Act, signed into law by President Donald Trump, which created a much more transparent regulatory framework for fiat-backed digital assets, legitimizing stablecoins and giving investors reason to be per reports, Compass Point analyst Ed Engel cautioned that this rally may be unwarranted. "Crypto investors often 'sell the news' following major legislative wins," said Engel. He added that CRCL has seen such a dramatic run-up that a backtrack is possible. He commented on the inevitable margin pressure resulting from increased revenue-sharing payments to distribution partners, as well as the incoming competition presented by traditional banks and fintech companies establishing their own stablecoins. Circle's revenue primarily comes from the interest on short-term Treasury holdings that back USDC. Analysts are mindful of potential changes in returns on Treasuries resulting from changes in the Federal Reserve's monetary policy. Seaport Research Partners raised its price target for Circle to $280 last week. They called Circle a "pure play" on stablecoins, designating it as one of the biggest beneficiaries of the new regulatory landscape. Wall Street analyst has a blunt warning on surging stock first appeared on TheStreet on Jul 22, 2025 This story was originally reported by TheStreet on Jul 22, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
a day ago
- Business
- CNBC
Compass Point's Ed Engel explains his downgrade of Circle to 'sell'
Compass Point's Ed Engel joins 'Closing Bell Overtime' to talk his downgrade of Circle Internet Group to a sell rating.
Yahoo
2 days ago
- Business
- Yahoo
Circle stock downgraded to Sell by Wall Street analyst citing rising competition, valuation concerns
Circle (CRCL) stock fell as much as 8% Tuesday after getting hit with a downgrade from Compass Point analysts who said the stock may be overvalued as competition in the space heats up. Compass Point downgraded Circle to Sell from Neutral and lowered the stock's price target to $130 from $216. The development comes on the heels of the Genius Act signed into law by President Trump last week. The legislation, designed to regulate the issuance and oversight of digital tokens backed by assets such as the US dollar and short term Treasury bills, has been a major catalyst for Circle stock. Shares are up more than 500% since the company's blockbuster IPO on June 5. "While we expected CRCL to rally into stablecoin legislation, crypto investors typically 'sell the news' after highly anticipated events," crypto and equity research analyst Ed Engel said in a note on Monday. "As such, we expect CRCL to retrace some of its recent rally," he added. Circle makes much of its money from interest income — specifically from short-term Treasury bills backing its stablecoin, USDC (USDC-USD). In recent weeks Wall Street analysts have flagged risks heading into the back half of the year for the high flyer, including rising distribution costs given that a significant portion of its reserve income is shared with partners like Coinbase (COIN). "In the coming months, we expect Circle to expand its distribution network while sharing a greater percent of interest income," Engel wrote. "We also expect traditional banks and Fintechs to announce competing stablecoin products," he added. Earlier this month Mizuho analyst Dan Dolev initiated coverage of the stock with an Underperform rating and a $85 price target. He noted that if the Federal Reserve starts cutting interest rates in September, yields on Treasurys would decline, impacting Circle's bottom line. "We believe consensus does not fully account for looming interest rate cuts, and also overstates USDC's medium-term growth potential," wrote Dolev and his team. Circle stock has rallied 500% since the company went public on June 5. (AP Photo/Richard Drew) · ASSOCIATED PRESS Not everyone is bearish on the stock. Wall Street remains divided, with 9 Buy, 6 Hold, and 4 Sell ratings, according to Bloomberg data. Last Friday, Seaport Research Partners raised its price target on Circle to $280 from $235. "For CRCL, we see the Genius Act passing as a watershed moment that will eventually unlock a substantial amount of new opportunity for stablecoins," analyst Jeff Cantwell wrote. "CRCL is a global leader in stablecoins and is the purest stablecoin play in the public markets right now, and we anticipate further gains in the shares as the company creates new opportunities for itself and its partners," he added.
Yahoo
07-07-2025
- Business
- Yahoo
Compass Point Remains Bullish on DeFi Technologies (DEFT)
DeFi Technologies Inc. (NASDAQ:DEFT) is one of the 13 Stocks Under $5 With High Upside Potential. In a report released on June 17, Ed Engel from Compass Point maintained a Buy rating on DeFi Technologies Inc. (NASDAQ:DEFT) with a price target of $6.50. A modern corporate finance office, full of financial analysts at work. The analyst based the rating on the company's potential for profitability and growth, stating that it has demonstrated the ability to transform its substantial assets under management into significant EBITDA. This suggests a strong operational model with a low fixed cost base. The analyst further reasoned that this efficiency is especially significant because of the company's small workforce, showing that DeFi Technologies Inc. (NASDAQ:DEFT) can attain further growth without considerable reinvestment. Another factor supporting the analyst's optimistic outlook for DeFi Technologies Inc. (NASDAQ:DEFT) is its international expansion strategy, especially the company's plans to exchange-traded products on stock exchanges in Singapore and the UAE. DeFi Technologies Inc. (NASDAQ:DEFT) provides investment services and plans to acquire debt, equity, or other securities of private or publicly traded companies or other entities. Its offerings include DeFi ETNs, DeFi Governance, DeFi Venture, and DeFi Treasury. While we acknowledge the potential of DEFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None.
