Key Takeaways
- Circle shares fell 10% today as crypto stocks, Robinhood included, slid with the market and seven firms cut their price targets.
- $182 million of Circle’s $865 million in third-quarter revenue came from a one-time presale of its ARC token.
- Income on the reserves behind USDC fell 8% to $658 million.
- Most of today’s drop came from the market, but the quarter gave investors little reason to buy the dip.
Circle Internet Group (CRCL) fell 10% today, as crypto stocks sank with the market and Wall Street picked apart its third-quarter beat.
Robinhood Markets (HOOD) fell 10%, and Bitcoin and the Nasdaq each dropped 5%. Robinhood’s crypto revenue fell 55% to $120 million in the third quarter, under a tenth of its $1.42 billion total. When a stock with that little crypto in its sales falls about as hard as Circle, investors are selling anything crypto-linked.
The beat had help
Circle’s revenue came in at $865 million on Wednesday morning, but $182 million of that came from the presale of ARC, the token for its new Arc blockchain. Circle had guided to about $180 million of presale revenue for all of 2026, so it booked roughly the whole year’s worth in one quarter.
Take it out, and revenue was $683 million, down from $740 million a year earlier. Income on the reserves behind USDC fell 8% to $658 million, as the return on those reserves slid to 3.5%.
JPMorgan said the beat came from a lower tax rate and more presale revenue than it had modeled, and that Circle’s core business is slowing. Mizuho’s Dan Dolev, who kept his Underperform rating, called the quarter “uneventful” and said the fourth-quarter margin outlook “seems soft.”
Binance takes its cut
Wells Fargo expects the renewed Binance contract to weigh on fourth-quarter margins, and 2027 margin estimates to come down.
Even before the report, analysts expected Circle’s normalized EPS to drop from $2.35 in 2025 to $1.15 this year, and to recover only to $1.91 by 2028:
If Wells Fargo is right, that 2027 estimate has further to fall.
TIKR tracks 29 analysts on Circle Internet Group. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Circle Internet Group, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Circle Internet Group’s Analyst Ratings
The stock’s cheaper than usual
Going into today, Circle traded at 56x forward earnings, below its one-year average of 73x:
At today’s price, it’s even lower.
The way I see it, Dolev’s “uneventful” is about right. Without the token sale, Circle’s revenue shrank from a year ago, and Binance squeezes margins next. That’s not a dip I’d rush to buy.
Of course, Circle’s payments network hit an annualized volume of over $41 billion, up 181% from the second quarter. Fourth-quarter results early next year, with the 2027 outlook, will show us whether it’s turning into real fees.
So what is Circle stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
