TLDR
- Compass Point downgraded CRCL to Sell, cutting its price target from $79 to $77
- ~80% of recent USDC supply growth came from distribution partners like Binance, Sky, and Ethena, squeezing margins
- Q1 EBITDA forecast to fall 19% quarter-over-quarter; FY2027 estimate sits 20% below Wall Street consensus
- Goldman Sachs held its Hold rating, nudging its target slightly higher to $99
- CRCL fell as much as 9.23% on April 8, reversing part of a 19% gain built up earlier in 2026
Circle Internet Group (CRCL) fell sharply on April 8 after Compass Point downgraded the stock to Sell and cut its price target to $77, down from $79. The stock dropped 7.44% to $87.41, giving back a chunk of the 19% gain it had built up through the first part of 2026.
Analyst Ed Engel at Compass Point flagged a structural problem: USDC is growing, but the growth is happening in the wrong places.
According to Engel, roughly 80% of USDC supply growth since early February has come from distribution partners â Sky, Binance, and Ethena. That matters because these partnerships come with revenue-sharing arrangements that cut into Circle’s portion of interest income from USDC reserves.
Circle earns more when USDC is held outside these partner networks. As the balance shifts toward partnership-driven supply, profitability gets diluted even as total circulation rises.
Engel warned that Q1 EBITDA could fall 19% compared to Q4 2024. His 2027 EBITDA forecast sits about 20% below the broader Wall Street consensus.
“CRCL’s 1Q results could underwhelm rising expectations,” Engel wrote, adding that gross margins are likely to stay under pressure if current trends continue into Q2.
Earnings Picture Gets Complicated
Reserve income is the engine of Circle’s business. In Q4 2025, it generated $733 million out of total revenue of $770 million. That’s a heavy reliance on prevailing interest rates, and it introduces real sensitivity to macro conditions.
USDC circulation did grow 72% to $75.3 billion during the same period. But a decline in reserve return rates partially offset that, showing how quickly the math can shift against Circle when yields move.
The company is working to diversify. Circle Payments Network, StableFX, and its Arc blockchain infrastructure are all in the mix. But non-interest income still makes up a small slice of total revenue, so those efforts haven’t moved the needle yet.
Goldman Sachs took a different view, reiterating a Hold and raising its price target slightly from $97 to $99 â implying around 14.56% upside from current levels, though stopping well short of a Buy.
Insider Sales Add to the Noise
SEC filings show that Circle director Rajeev V. Date sold stock on April 6 and April 7 â the two trading days just before the selloff.
On April 6, Date exercised options at $0.08 per share and sold 2,546 units at $92.99. The next day, he sold another 1,273 units at $95. Both transactions were executed under a pre-arranged 10b5-1 plan.
The timing drew attention, though 10b5-1 plans are designed specifically to remove the appearance of opportunistic selling.
By the afternoon of April 8, CRCL had slipped to $85.72, down 9.23% on the day.
Across 27 analysts tracked by FactSet, 48% rate the stock a Buy and 44% have a Hold, with an average price target of $131.29.
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