Is Robinhood (HOOD) Stock a Buy After 17% Post-Earnings Drop?

TLDR

• Robinhood (HOOD) shares plunged 17% following Q4 earnings that beat EPS expectations at $0.66 but missed revenue forecasts at $1.28 billion versus $1.35 billion expected.
• Crypto revenue dropped 38% to $221 million on weaker trading volumes, though prediction markets reached record $3.5 billion in January contract volumes.
• Analysts maintained Buy ratings despite cutting price targets, with consensus at $135.46 implying 90.5% upside from current levels.
• CFO Shiv Verma emphasized crypto represents only 18% of total revenue as company pursues financial super app strategy with institutional expansion.
• Shares are down 37% year-to-date, with analysts viewing current prices as accumulation opportunity ahead of expected Q2 crypto recovery.

Robinhood Markets suffered a sharp two-day selloff this week, with shares dropping nearly 17% after releasing Q4 results on February 10. The trading platform delivered mixed numbers that left investors disappointed.

Robinhood Markets, Inc., HOOD

EPS came in at $0.66, topping analyst estimates of $0.63 per share. Revenue told a different story at $1.28 billion, missing the $1.35 billion consensus by a wide margin.

The culprit was crypto. Transaction revenue from cryptocurrency trading collapsed 38% to $221 million as volumes evaporated across the industry.

Year-to-date, HOOD is down 37%. Investors now face a critical decision about whether these prices represent value or further downside.

Wall Street Lowers Targets But Stays Bullish

Truist Financial’s David Smith slashed his price target from $130 to $120 while maintaining his Buy rating. He described the report as “frustrating,” noting weak user growth and net deposits in December. January numbers improved slightly.

Needham’s John Todaro dropped his target to $100 from $135 but kept his Buy stance. He expects crypto weakness to last two more quarters before recovering. Options and equities trading also showed softer trends entering fiscal 2026.

Prediction Markets Shine as Crypto Stumbles

While crypto disappointed, prediction markets delivered standout performance. January contract volumes hit a record $3.5 billion, showcasing rapid growth in this emerging segment.

CFO Shiv Verma pushed back on concerns about crypto exposure in an interview with Yahoo Finance. He stressed that crypto accounted for just 18% of revenue last year, with over 80% coming from other sources.

Robinhood is betting on multiple catalysts for crypto recovery. Real-world asset tokenization and institutional market penetration top the list. Verma noted institutions increasingly treat crypto like traditional asset classes, particularly after crypto ETF launches.

Analysts See Buying Opportunity

Chhugani identified the $60 to $75 range as attractive for accumulation, even if crypto stays weak near-term. He projects prediction markets could become a billion-dollar annual business in 2026.

The company continues investing in its product roadmap. AI tools for active traders and expansion of the Robinhood Gold Card lead priorities. The TradePMR acquisition targets younger investors through human advisers.

On TipRanks, HOOD carries a Strong Buy consensus from 14 Buy ratings and two Hold ratings. The average analyst price target of $135.46 suggests 90.5% potential upside from current trading levels.

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