Robinhood (HOOD) Stock: Buy the Dip or Is Another Drop Coming?

TLDR

• Robinhood (HOOD) shares plunged 17% following Q4 earnings that beat EPS at $0.66 but missed revenue expectations of $1.35 billion
• Crypto transaction revenue dropped 38% to $221 million due to declining trading volumes across digital assets
• Wall Street analysts lowered price targets but kept Buy ratings, with average target implying 90.5% upside potential
• Prediction markets delivered record $3.5 billion in January contract volumes, emerging as key growth driver
• Stock down 37% year-to-date as analysts debate whether current levels present buying opportunity

Robinhood Markets suffered a steep two-day decline of nearly 17% after reporting mixed fourth-quarter results on February 10. The stock’s tumble has investors questioning whether this represents a temporary setback or deeper issues.

Robinhood Markets, Inc., HOOD

The company beat earnings expectations with $0.66 per share versus the $0.63 consensus. However, revenue of $1.28 billion fell short of the $1.35 billion Wall Street anticipated. The $70 million shortfall triggered the selloff.

Crypto trading drove most of the disappointment. Transaction revenue from digital assets fell 38% to $221 million as trading volumes weakened across the platform. With crypto representing about 17% of total Q4 revenue, the decline hit hard.

December performance added pressure. User growth stalled and net deposits weakened during the month. Options and equities trading also showed softer momentum heading into 2026.

Analysts Cut Targets But Stay Optimistic

Truist Financial analyst David Smith reduced his price target from $130 to $120 while maintaining his Buy rating. He called the report “frustrating” but sees 68.7% upside potential from current levels.

Smith noted January showed improvement over December’s weak performance. He maintains conviction in the long-term story despite near-term volatility weighing on shares.

Needham analyst John Todaro slashed his target to $100 from $135, implying 40.6% upside. He expects crypto weakness to last two more quarters before recovery begins. Todaro highlighted that Q4 results met his internal estimates overall.

Piper Sandler analyst Patrick Moley trimmed his target from $155 to $135 but kept his Buy rating. His $135 target suggests 89.8% upside potential. Moley called Robinhood “the best way to play secular growth in retail trading” for investors willing to handle volatility.

Record Prediction Market Volumes Provide Bright Spot

Prediction markets emerged as a standout performer. January volumes reached a record $3.5 billion in contracts. The segment continues expanding as Robinhood builds out new products beyond traditional trading.

Bernstein SocGen Group maintained an Outperform rating with a $160 price target on February 3. Analyst Gautam Chhugani noted the stock is approaching “attractive valuation zone” despite potential for more near-term weakness.

Bernstein’s analysis showed cryptocurrency operations represented 21% of total revenue year-to-date in 2025. This exposure makes the stock sensitive to crypto market fluctuations.

The TipRanks consensus shows 14 Buy ratings and two Hold ratings among analysts covering the stock. No analysts rate it as a Sell. The average price target of $135.46 implies 90.5% upside from current trading levels.

Shares closed Friday at $71.14, down 37% year-to-date. The stock has fallen from recent highs above $100 per share as investors reassess growth prospects.

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