Circle Stock Reverses Gains After Mixed Q2 Results

Circle reported mixed second-quarter results, which initially led to a 7% rally in its stock before it reversed and fell nearly 3%. The company's revenue of $701 million missed Wall Street's estimate of $717 million, but its earnings per share of $0.18 narrowly beat the consensus forecast of $0.17.

Circle's net income exceeded expectations at $48 million, compared to analysts' estimate of $45.8 million. However, the company's adjusted EBITDA margin fell 329 basis points from the same quarter last year, indicating pressure on its operating profit margins.

Mizuho maintained its Underperform rating and $45 price target on Circle stock, citing concerns about weaker USDC activity and shrinking margins. The brokerage pointed to a sequential decline in USDC circulation and a 31% quarter-over-quarter drop in on-chain transaction volume as key risks for the company's future performance.