Stablecoin giant Circle (CRCL.US) shares are on a “roller coaster” Wall Street analysts have mixed reviews

The Zhitong Finance App learned that the stock price of “the first stablecoin” Circle (CRCL.US) is like riding a “roller coaster”. The stock soared after listing in early June, but recently there has been a sharp correction in its stock price. Wall Street analysts have mixed reviews about the stock.

Needham gave Circle a “buy” rating. Needham analyst John Todaro believes the company may “be in a paradigm shift to support premium valuations similar to Tesla (TSLA.US) or dominant artificial intelligence (AI) companies.” USDC, which is pegged to the US dollar issued by Circle, is the second-largest stablecoin by market capitalization.

Todaro believes that USDC's dominant position as a “reserve asset” in the decentralized finance sector has attracted 12 billion US dollars in stable customer capital requirements. The widespread use of stablecoin payments and remittances also supports Todaro's bullish views.

J.P. Morgan gave Circle a “reduced holdings” rating. J.P. Morgan analyst Kenneth Worthington said Circle “has a first-mover advantage in a winner-take-all market.” But he added that this also meant higher valuations.

Worthington said that the median value of Circle's initial public offering (IPO) price range is $31 per share, which is equivalent to a market value of $8 billion. Its current stock price and market capitalization are $181.29 and $40 billion, respectively.

Meanwhile, Deutsche Bank believes that Circle shares are reasonably valued and gave them a “hold” rating for the first time. Deutsche Bank said, “Although we see that stablecoins are expected to be widely and strongly used in the industry, the range of results is very wide, which is likely to cause large fluctuations in profit forecasts and stock prices in the short term.”

Despite a sharp rise in valuation, Citi still gave Circle a “buy” rating. Citibank analyst Peter Christiansen said, “We believe that scarcity values, the 'winner-take-all' model, huge potential market space, legislative momentum, and Circle's huge operating leverage potential all provide strong support for the stock's rise over the next few years.”