Circle (CRCL), the stablecoin issuer that has seen a meteoric rise since its IPO in June, will report quarterly results on Tuesday for the first time since going public.
The stock is up more than 400% from its IPO price of $31 per share as crypto-friendly legislation has lifted the sector.
Wall Street expects Circle to post a Q2 loss when it reports before the market open, with consensus calling for an adjusted per-share loss of $0.08 on revenue of $647 million, according to Bloomberg data.
Investors will watch for growth in USDC circulation and stablecoin market share following the passage of the Genesis Act, legislation that creates guardrails and a framework for digital tokens backed by assets such as the US dollar.
Circle makes much of its money from interest income — specifically from short-term Treasury bills backing its stablecoin, USDC (USDC-USD).
The company’s income earned from the management of stablecoin-related reserves grew from $735.9 million in 2022 to $1.4 billion in 2023 and $1.7 billion in 2024.
That represented 95.3%, 98.6%, and 99.1%, respectively, of Circle’s total revenue from continuing operations.
Circle also shares part of its revenue with Coinbase (COIN), a major partner.
Last month, Wall Street analysts flagged risks heading into the back half of the year for the highflier, including rising distribution costs.
“In the coming months, we expect Circle to expand its distribution network while sharing a greater percent of interest income,” Compass Point analyst Ed Engel wrote. He downgraded the stock to Sell from Neutral.
“We also expect traditional banks and Fintechs to announce competing stablecoin products,” he added.
However, others on Wall Street see the stock as a way for investors to participate in rising enthusiasm over stablecoins.
“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,” wrote Seaport Research analysts Jeff Cantwell last month.
The analyst has a Buy Rating and price target of $280 on the stock.
Circle’s results come as the overall market hovers near all-time highs and crypto rallies on expectations of Federal Reserve rate cuts and President Trump’s push to include crypto in 401(k) plans.
Bitcoin (BTC-USD) and ethereum (ETH-USD) have both emerged as winners in the crypto space.
On Monday, Bernstein analysts noted Circle as a way to play growing interest in the ethereum network, as its native coin has surged roughly 20% year to date.
“Circle’s USDC is minted and settled on Ethereum,” wrote analyst Gautam Chhugani and his team on Monday.
The analyst notes that over the last three months, USDC’s total supply has increased by 7% to over $65 billion today.
“The rise of Ethereum and its growing on-chain financial ecosystem drives demand for USDC as collateral in smart contracts (e.g trading/lending/asset management applications) as well as settlement currency/collateral,” wrote Chhugani.
Wall Street analysts currently have nine Buy, five Hold, and four Sell ratings on Circle stock.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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