Circle Stock Before Q4 Earnings Release: Should Investors Stay Away?

Circle Internet Group CRCL is scheduled to report its fourth-quarter 2025 results on Feb. 25, 2026.

The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $748.62 million, reflecting expectations for solid top-line performance. The consensus mark for earnings is currently pegged at 15 cents per share, which has remained unchanged over the past 30 days but declined by 1 cent over the past 60 days.

In the last reported results for the third quarter of 2025, Circle posted adjusted earnings of 64 cents per share, comfortably surpassing the Zacks Consensus Estimate of 20 cents. Circle, widely recognized as the issuer of the USDC stablecoin, debuted on the New York Stock Exchange under the ticker CRCL on June 5, 2025.

Circle Internet Group, Inc. Price and EPS Surprise

Circle Internet Group, Inc. price-eps-surprise | Circle Internet Group, Inc. Quote

Earnings Whispers for CRCL Stock

Our proven model does not conclusively predict an earnings beat for Circle this time. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as you can see below.

Circle has an Earnings ESP of +2.94% at present and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Factors Shaping CRCL’s Q4 Results

Circle’s revenue model remains highly sensitive to interest rates, as reserve income is primarily generated from assets backing USDC. In the previous quarter, the reserve return rate declined approximately 96 basis points year over year to around 4.15%, reflecting lower SOFR, which partially offset the 97% growth in average USDC in circulation. This softer yield environment constrained reserve income expansion despite strong circulation growth, and if benchmark rates continued to ease during the fourth quarter, Circle’s reserve income and overall margin profile are expected to have been negatively affected in the quarter under review.

Circle’s distribution-driven expansion model remains a structural margin headwind, as growth in USDC circulation is accompanied by proportionally higher partner payouts and platform-related incentives. These distribution and transaction costs increased significantly in the third quarter, reflecting heightened activity across key ecosystem partners. This dynamic contributed to a 270-basis-point year-over-year decline in RLDC margin. Unless payout efficiency improves, continued USDC growth is likely to have sustained pressure on operating leverage in the fourth quarter of 2025.

Circle faces intensifying competition from both new and established stablecoin issuers, alongside the rising appeal of yield-bearing digital assets such as tokenized money market funds, which could dampen demand for its stablecoins. As interest-bearing alternatives continue attracting digital asset trading participants seeking returns, non-yielding USDC may experience relative demand pressure despite broader market expansion. In a still-elevated rate environment, these yield-driven substitution trends are likely to have moderated USDC circulation momentum and are expected to have adversely impacted performance in the to-be-reported quarter.

However, Circle’s expanding high-margin “Other Revenue” has become an increasingly meaningful growth driver. In the previous quarter, it increased significantly year over year, driven by subscription and services revenues of $23.6 million and rising transaction revenues as newer infrastructure products gained traction. Management subsequently raised its full-year 2025 guidance for other revenues to $90-$100 million, showing stronger visibility and sustained demand momentum. Given the accelerating adoption of subscription-based and transaction-driven services, high-margin other revenues are expected to have further supported overall profitability in the fourth quarter of 2025.

CRCL’s Stock Price Performance & Valuation

Over the past six months, CRCL shares have plunged 53.3%, sharply underperforming the broader Finance sector’s 6.4% gain. The stock has also lagged major crypto and blockchain peers such as CleanSpark CLSK and Coinbase COIN. While CleanSpark gained 4.7% during this period, Coinbase fell 44.9%, both outperforming CRCL’s steeper decline. Even fintech peer PayPal PYPL fell 38.4%, but PayPal still fared better than CRCL. This wide performance gap highlights CRCL’s marked weakness compared with CleanSpark, Coinbase and PayPal, as well as the broader sector.

CRCL 6-Month Stock Performance

From a valuation perspective, CRCL appears stretched, as reflected in its Value Score of F. The stock is currently trading at 67.67X forward earnings, significantly higher than the industry average of 11.36X.

CRCL Forward 12-Month P/E Ratio

Investment Considerations of CRCL Stock

Circle enters the fourth quarter of 2025 with solid growth but rising pressures. The business remains highly sensitive to interest rates, distribution costs continue to weigh on margins and competitive intensity in the stablecoin and yield-bearing asset space is increasing. The stock also carries broader crypto-market volatility risk, and regulatory uncertainty remains a potential overhang.

However, USDC circulation continues to grow and expanding partnerships are supporting platform scale. Sustaining margins will be critical for improving investor confidence.

End Note: Stay Away From CRCL Stock for Now

Despite solid revenue growth and expanding high-margin “Other Revenue,” Circle faces mounting margin pressure from lower reserve yields, rising distribution costs and intensifying competition. With a stretched valuation, CRCL does not appear attractive ahead of earnings. Investors may prefer to stay on the sidelines.

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This article originally published on Zacks Investment Research (zacks.com).

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