Robinhood (HOOD) Stock Drops 17% But Analysts Say Buy the Dip

TLDR

• Robinhood (HOOD) stock dropped 17% over two days after Q4 earnings beat EPS estimates at $0.66 but missed revenue forecasts with $1.28 billion versus $1.35 billion expected
• Crypto transaction revenue plunged 38% to $221 million due to lower trading volumes, while December showed weak user growth and net deposits
• Analysts trimmed price targets but maintained Buy ratings, with targets ranging from $100 to $160, suggesting 40-90% upside potential
• Prediction markets emerged as a bright spot with January volumes hitting a record $3.5 billion in contracts
• Shares are down 37% year-to-date, but 14 out of 16 analysts maintain Strong Buy consensus with average price target of $135.46

Robinhood Markets took a beating this week, dropping nearly 17% over two trading sessions following its February 10 earnings report. The retail trading platform delivered a mixed bag of results that left investors heading for the exits.

Robinhood Markets, Inc., HOOD

The company posted earnings per share of $0.66, beating the consensus estimate of $0.63. But revenue came in at $1.28 billion, missing the $1.35 billion Wall Street expected. The gap between expectations and reality spooked investors already nervous about the stock’s performance.

Crypto transaction revenue bore the brunt of the disappointment. The segment fell 38% to $221 million, driven by lower trading volumes across the platform. Crypto made up roughly 17% of Q4 total revenue, making its decline particularly painful for overall results.

December numbers added to the concern. User growth stalled and net deposits weakened during the month. Options and equities trading also showed softer performance heading into the new year.

Analysts Lower Targets But Keep Faith

Despite the stock’s slide, Wall Street analysts aren’t abandoning ship. Truist Financial analyst David Smith cut his price target from $130 to $120 but maintained his Buy rating. He called the Q4 report “frustrating” and noted that outside of prediction markets, Robinhood had few positives to highlight.

Smith sees long-term potential despite near-term volatility. His $120 target still implies 68.7% upside from current levels. He acknowledged the weak December performance but noted January showed some improvement.

Needham analyst John Todaro slashed his target to $100 from $135 while keeping his Buy rating. He expects crypto weakness to persist for two quarters before recovering. His target suggests 40.6% upside potential.

Todaro pointed to strong Q4 results overall that met his internal estimates. Prediction markets stood out as a major winner, with January volumes reaching a record $3.5 billion in contracts. However, crypto volumes and take rates declined in fiscal 2026, along with options and equities.

Prediction Markets Shine Through Darkness

Piper Sandler analyst Patrick Moley trimmed his target from $155 to $135 but kept his Buy rating intact. His target implies 89.8% upside potential. Moley acknowledged short-term headwinds but defended his long-term thesis.

Bernstein SocGen Group maintained an Outperform rating with a $160 price target on February 3. Analyst Gautam Chhugani noted the stock is “fast approaching attractive valuation zone” despite near-term volatility that might create more attractive entry points.

Bernstein’s analysis highlighted that cryptocurrency operations represented 21% of Robinhood’s total revenue year-to-date in 2025. This exposure to crypto markets makes the stock particularly sensitive to trading volume fluctuations in digital assets.

The consensus view on TipRanks shows 14 Buy ratings and two Hold ratings. No analysts currently rate the stock as a Sell. The average price target of $135.46 suggests 90.5% upside potential from current levels.

Shares have fallen 37% year-to-date, wiping out gains from the previous quarter. The stock closed at $71.14 on Friday, down from recent highs above $100 per share.

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