Circle Internet Group (CRCL) stock is sinking on Nov. 5 after the company revealed that it reduced its workforce by about 5% in the third quarter, incurring $9.1 million in restructuring costs. In its press release, management said the layoffs were intended to better align CRCL's organizational structure with its operating model and strategic priorities.
Including today’s decline, Circle shares are trading down 50% versus their year-to-date high.
What the Layoffs Mean for Circle Stock
Circle attributed restructuring charges mostly to severance payments, employee benefits, and other termination-related costs.
For investors, the layoffs may reflect management's commitment to improve efficiency and protect margins. While Circle remained highly profitable in its just-reported quarter (Q3), its reserve return rate fell to 3.5%, down 61 basis points year-over-year, and reserve income also came in down even though USDC usage remained strong.
CRCL shares are therefore slipping as investors question whether USDC adoption and new product rollouts can help offset fluctuations in interest-related revenue.
How to Play Circle Shares After Q3 Earnings?
Circle’s third-quarter earnings release did contain some encouraging signs, though. The company’s adjusted EBITDA soared 85% on a year-over-year basis to $317 million. USDC on-chain transaction volume jumped 49%, and its payments network annualized volume exceeded $41 billion.
However, a $182 million ARC token presale provided a significant one-time boost.
Following the quarterly release and layoffs announcement, Needham’s senior analyst John Todaro reiterated his “Buy” rating on CRCL stock. He trimmed his price target on the crypto firm to $103, but that still represents potential upside of nearly 60% from current levels.
On the flip side, though, Barchart holds a “72% SELL” average opinion on Circle Internet Group, indicating technical momentum is not in its favor heading into 2027.
Wall Street Remains Bullish on Circle Internet Group
While not as bullish as Needham, other Wall Street firms also believe Circle stock is undervalued at current levels.
According to Barchart, the consensus rating on Circle Internet Group sits at “Moderate Buy,” with the mean price target of about $92 signaling potential for a nearly 40% rally from here.
On the date of publication, Wajeeh Khan did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.