Investment Banks/Brokers · #31 in the Retail 100

Robinhood Markets

HOOD

Crypto stocks follow bitcoin↑The prediction market boom↑

Our rating: hold
12-month target: $99.62 +16.3%
Expected vs. S&P 500: -2.2 ptsSee the math
Next earnings: Feb 9In 96 daysEarnings calls page ↗

Robinhood's record revenue did not lift adjusted earnings per share, which fell 3% from a year earlier as crypto revenue dropped 55% and interest revenue 9%.

Summary

Robinhood is a U.S. trading app that earns money from trades, interest on customer cash and loans, and its Gold subscription. Crypto trading, once its biggest swing factor, fell 55% in the third quarter, and interest income, now its largest line, fell 9%. Options, stocks and prediction markets, contracts that pay out on events such as sports results, still lifted revenue 12% to a record. The stock depends on those newer lines turning revenue growth back into profit growth.

$85.68

-$50.12 (-36.91%)Past year

What Robinhood Markets does

Robinhood is a commission-free U.S. trading app. Trading firms pay it to fill customers' orders, and it earns interest on their cash and loans, so its revenue rises and falls with how much people trade.²⁴

What it sells

Interest income29% of revenue, Q3 2026
Interest on margin loans to customers who borrow to trade, and on customers' uninvested cash. It grows with balances and falls with interest rates.
Options trading28% of revenue, Q3 2026
Contracts that bet on a stock's moves, its largest trading product. Trading firms pay Robinhood for sending these orders to them.
Prediction markets12% of revenue, Q3 2026
Contracts that pay out on events such as sports results. A small line a year earlier, it now earns more than crypto.
Stock trading8% of revenue, Q3 2026
Commission-free stock trades, paid for by the trading firms that fill them. Revenue rises and falls with how much customers trade.
Crypto trading8% of revenue, Q3 2026
Payments from crypto trading firms plus trading fees, including at Bitstamp, a crypto exchange Robinhood bought.

Who buys it

Individual investors, mostly in the U.S.: 28.7 million customers had funded accounts in Q3 2026. Of those, 5.2 million pay for Robinhood Gold, a subscription with perks such as cheaper margin loans. It also has smaller businesses in the U.K. and EU.

Where you've seen it

Robinhood was the first retail broker to offer commission-free stock trades, which the rest of the industry later adopted.

The backstory

Robinhood's revenue has long risen and fallen with crypto trading, and crypto slumped in 2026. So Robinhood is building businesses that hold up whatever crypto prices do: prediction markets, interest on customer deposits, and paid Gold subscriptions. The bet is that a broad app keeps customers trading, saving and spending in one place.

How the business makes money

Why each extra trade is mostly profit for Robinhood^1,2,24

Step 1
Free trading and new products pull people in: 28.7 million customers have funded accounts.
Step 2
Their cash and margin loans earn Robinhood interest, $415M last quarter, though lower rates cut it 9% from a year earlier.
Step 3
When they trade options, stocks, crypto or prediction contracts, Robinhood earns money on each trade. Trading revenue rose 19% last quarter.
What shareholders get
Costs are mostly fixed, about $2.7B for the year, so when trading picks up, profit can grow faster than sales. That's the growth the stock price is betting on.

Advantages

Customer money keeps arriving

Major advantage

Robinhood's biggest advantage. Customers moved in $71.0B over the 12 months to September. Along with higher stock prices, that lifted platform assets to $396B.²⁴

Many products in one app

Strong advantage

A strong draw. Gold, the credit card, Legend and other business lines each now earn $100M or more a year, 14 in all, so customers can trade, save and spend without leaving the app.²⁴

Owning a prediction-market exchange

Supporting

Promising, but new. Rothera, a prediction-market exchange Robinhood runs with Susquehanna, launched in June and passed $100M in annualized revenue in its first full quarter, with over 6.4B contracts traded since launch.^2,24

What's changing

Robinhood's revenue is growing, but profit per share is not

Revenue hit a record in the third quarter, led by options, stocks and prediction markets. But crypto fell 55%, interest income fell 9%, and adjusted earnings per share slipped 3%. Robinhood is still adding products: Rothera passed $100M in annualized revenue, the September HOOD Summit announced 17 products, and it launched UK crypto trading.^24,13

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Robinhood Markets
Robinhood Marketsthis stock	$77.14B	Robinhood is a commission-free U.S. trading app. Trading firms pay it to fill customers' orders, and it earns interest on their cash and loans, so its revenue rises and falls with how much people trade.
Charles SchwabSCHW	$155.20B	Full-service broker for retirement and wealth accounts, with advisors and banking.	Schwab holds far more assets; Robinhood grows faster, adding crypto and prediction markets.¹⁴
Interactive BrokersIBKR	$136.74B	Low-cost global broker for active traders, offering markets in many countries.	Interactive Brokers serves fewer, wealthier traders; Robinhood has five times the customers.¹⁵
CoinbaseCOIN	$42.12B	Largest U.S. crypto exchange, earning mostly from crypto trading fees.	Coinbase depends on crypto; Robinhood's stocks and options cushioned the crypto slump.¹⁶
Kalshi (private)private	—	Runs a U.S.-regulated prediction-market exchange where people trade on real-world events.	Once a partner; Robinhood now moves volume to Rothera, its own exchange.^2,17

Leadership

Who runs the company, and how the stock has done under the CEO.

HOOD +146.1%S&P 500 +83.6%Total return with dividends since listing in Jul 2021 · log scale

20222023202420252026

Vlad TenevFounder, Chair, CEO and President6 yrs, since 2020

Shiv VermaCFO8 mo

Wall Street on Tenev: PositiveGoldman Sachs rates it a Buy, citing AI that places trades for users and round-the-clock stock trading. KBW rates it a Hold, noting Robinhood's shrinking share of stock and options trading and flat crypto volumes.^L6,L7

Leadership sources (7) · researched Oct 2026

L1Robinhood co-founder steps down as co-CEO, leaving Vlad Tenev as sole chief ahead of a rumored IPO · Fortune, 2020-11-20
L2Robinhood Board of Directors · Robinhood Markets, 2026-10-11
L3Robinhood shares slump after CFO shakeup, earnings · CFO Dive, 2025-11-06
L4Robinhood Markets, Inc. Form 8-K: appointment of Shiv Verma as Chief Financial Officer · Robinhood Markets / SEC, 2026-02-10
L5Robinhood Reports Fourth Quarter and Full Year 2025 Results · Robinhood Markets, 2026-02-10
L6BofA raises Robinhood stock price target on trading strength · Investing.com, 2026-10-05
L7Keefe Bruyette raises Robinhood stock price target on volume trends · Investing.com, 2026-09-29

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will Robinhood earn the roughly $2.96 a share analysts expect for 2027, about 36% more than 2026, even if crypto trading stays weak?^{1,2,5,7,24,26,29,32}

Bull case: why buyers buy

Prediction markets, Gold subscriptions and customer deposits keep growing, so Robinhood reaches 2027 forecasts without needing a crypto recovery.

Prediction markets are still the fastest-growing business. Their revenue rose more than sixfold from a year earlier to $173M in the third quarter.
Customers keep sending in money. Net deposits were $15.7B in the third quarter, a 17% annualized growth rate, adding cash that earns interest whatever crypto does.
More customers are paying a subscription. Gold subscribers rose 34% from a year earlier to a record 5.2 million.
Spending is being held down. Robinhood cut the top of its 2026 expense budget by $25M, though the budget leaves out credit losses, regulatory costs and some one-time items.

Bear case: why sellers sell

If courts let states restrict sports contracts or retail trading cools further, earnings fall short of 2027 forecasts, and the high valuation leaves little cushion.

Crypto is still shrinking. Crypto revenue fell 55% from a year earlier in the third quarter, a steeper drop than the second quarter's 38%.
The legal fight over sports contracts is not settled. Robinhood has asked the Supreme Court to review the Nevada ruling against it.
Profit per share is not keeping pace with revenue. Adjusted earnings fell 3% from a year earlier, and the CFO said early fourth-quarter trading spreads are a little tighter.
The stock already prices in fast growth. At the $91.43 close on October 28 it trades at about 42 times the earnings analysts expect for 2026.

Where Delphi landsholdWe think today's price already weighs both sides fairly.See why

What to watch

The numbers that will settle the debate.

Prediction-market contracts traded▲ improving

16.4B in the third quarter, a record and over seven times a year earlier, up from 13.6B in the second.^1,24

Shows whether the newest revenue line keeps growing outside the football and World Cup peaks.

Crypto trading volume▼ worsening

$50B in the third quarter, down 38% from a year earlier; the Robinhood app alone fell 48%.²⁴

Shows whether Robinhood's weakest revenue line is still falling or starting to recover.

Net deposits■ unclear

$15.7B in the third quarter, a 17% annualized pace, down from a record $21.7B in the second. October so far is above $13B, including $6B from one family's Trump Account contribution.^1,24

New customer money drives future trading, interest and subscription revenue.

Next earnings report

Feb 9

In 96 days

Earnings calls page ↗

Expected earnings per share: $0.61
Expected revenue: $1.52B

What to listen for: Whether trading revenue holds up as spreads tighten, whether crypto volume stops falling, and how much of October's deposit pace is real inflow rather than one-off transfers.^24,26,28

What would prove this wrong

✕The Supreme Court declines review and more states block sports prediction contracts.
✕Crypto trading volume keeps falling from a year earlier through 2027.
✕Net deposits slow sharply, showing new customer money has stopped arriving.
✕Expenses rise above the 2026 budget as new products launch.
✕Kalshi or Coinbase win prediction-market volume away from Robinhood's Rothera exchange.

Our ratingHoldas of Nov 3 close, $85.68 · what ratings mean

Analysts expect earnings to grow about 22% as prediction markets offset weak crypto, but at 34 times expected earnings the stock's likely gain is slightly below the S&P 500's.

12-month target: $99.62 (+16.3%)
S&P 500, same method, with dividends: +18.5%
Expected vs the market: -2.2 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $85.68

Target $99.62

bull case25% likely

$136.32 +59%

Prediction markets, Gold and deposits keep growing and crypto recovers, pushing earnings for the year to September 2028 toward the top of analysts' range.

$3.67 earnings per share × 37.2 = $136.32

base case50% likely

$94.29 +10%

Newer product lines offset weak crypto and falling interest, and earnings for the year to September 2028 match the analyst consensus.

$3.36 earnings per share × 28.1 = $94.29

bear case25% likely

$73.57 -14%

States win the right to restrict sports contracts or retail trading cools, so earnings land near the low end of analysts' range, below consensus.

$3.13 earnings per share × 23.5 = $73.57

Why these odds: Adjusted profit beat estimates again and 2027 estimates rose about 12% in 90 days, but revenue missed slightly, adjusted EPS fell 3% from a year earlier, and early fourth-quarter spreads are tighter. The evidence is balanced, so bull and bear odds are equal.

How the prices are built: Wall Street expects earnings per share of $3.36 for the year starting a year from now (analysts range from $2.89 to $3.97). Today the stock trades at 31 times next year's earnings per share; its five-year middle is 20.1. Because earnings per share is forecast to grow fast, valuations are cut 1%, since fast growth rarely keeps its price.^{29,30,31,28,24,27}

What tests the call: Q4 2026 earnings (date unconfirmed): trading spreads, prediction-market and crypto volumes (Feb 10)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 28; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $85.68, investors pay 66% more than they pay for the average stock's earnings

Robinhood Markets trades at 31 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is above its five-year middle of 20.

Analysts expect earnings to grow about 22% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. The premium is a bet that Robinhood Markets's earnings keep growing faster than the market's for years, not just next year.

Robinhood Markets multiple: 31×
S&P 500 multiple: 19×
Base case: +10%
Bear case: −14%

The skewOur bear case loses about $1.41 for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

Q3 2026 results, reported Oct 27

Record revenue and a beat on adjusted profit, but crypto and interest revenue fell and early fourth-quarter spreads are tighter.^{24,25,26,27,28}

Reported Oct 27	Expected	Actual	Difference
Earnings per share	$0.56	$0.60	+7.5%
Revenue	$1.44B	$1.42B	-1.0%

Stock reaction: -3.3% next day (closed at $91.43 on Oct 28, from $94.56)

Why the stock moved

Timing: results came after the close on October 27, so October 28 was the first reaction day.
Down: revenue of $1.42B was slightly below the $1.43B to $1.44B expected, and crypto revenue fell 55% to $120M.
Down: the CFO said early fourth-quarter spreads are a little tighter. Shares fell 8.7% pre-market, then closed down 3.3%.
Down: standard-accounting operating expenses rose 16%, faster than the 12% revenue growth, and net interest revenue fell 9%.
Offset: adjusted EPS of $0.60 beat estimates, and prediction-market revenue rose over sixfold to $173M.

What it means for the stock: Kept the case that Robinhood can grow revenue without crypto, but showed that profit per share is not yet growing with it and that interest income is now a drag.