Robinhood Markets (HOOD) is a commission-free monetary companies platform that constructed its popularity on democratizing buying and selling. However when crypto goes chilly, the earnings mannequin feels it quick.
HOOD earns a Zacks Rank #5 (Sturdy Promote) and is as we speak’s Bear of the Day.
About Robinhood
Headquartered in Menlo Park, CA, Robinhood is a monetary companies firm that permits clients to commerce equities, choices, futures, occasion contracts, and cryptocurrencies on a commission-free foundation. The platform additionally gives ETFs, money administration, margin lending, bank cards, and Robinhood Gold, its premium subscription tier.
The corporate serves clients in the USA, the UK, and choose European Union markets. As of March 31, 2026, Robinhood had 27.4 million funded clients, $307 billion in whole platform property, and 4.3 million Gold subscribers.
HOOD is valued at $80 billion and has a Ahead PE of 47. The inventory has Zacks Model Scores of “F” in Worth, however “A” in Momentum.
Q1 Earnings Miss
Robinhood’s Q1 outcomes missed on each the highest and backside strains. EPS of $0.38 got here in under the $0.40 estimate. Income of $1.07 billion missed the $1.14 billion consensus by a significant margin. The wrongdoer was crypto. Crypto notional buying and selling quantity of $66 billion fell 48% yr over yr as Bitcoin retreated and informal merchants stepped away from the asset class. That single line merchandise swung all the income image.
The underlying enterprise confirmed real energy in different areas. Gold subscribers reached 4.3 million, up 36% yr over yr. Retirement property beneath custody hit $27.4 billion, up 90%. Internet deposits grew at a 20% annualized fee. Adjusted EBITDA of $534 million grew from $470 million a yr in the past. However none of that offset the crypto crater, and the estimates mirror it.
The Estimate Collapse
The revision desk is the bear case in numbers. Present yr EPS sat at $2.32 ninety days in the past. It’s now $1.85, a 20% collapse within the consensus in a single quarter. Subsequent yr fell from $2.81 to $2.49 over the identical window.
9 analysts revised the present yr decrease within the final 60 days. Zero revised it decrease within the final 7 days, which suggests the cuts could also be stabilizing, however the harm is already performed and the inventory is priced for a restoration that relies upon closely on crypto sentiment.
The Bitcoin Downside
Bitcoin has fallen from roughly $85,000 to $60,000 over the previous month. That transfer issues enormously for Robinhood as a result of crypto income is excessive margin and extremely unstable.
When informal crypto merchants step away, as administration confirmed they did in Q1 and into April and Could, the income affect is instant and the expense base doesn’t shrink with it.
Administration is investing a further $100 million in 2026 to construct the Trump Accounts consumer interface, elevating the full-year adjusted working expense outlook to $2.7 to $2.825 billion. Spending goes up at precisely the second crypto income goes down.
Technicals Look Bleak
After an enormous run late final yr, the inventory has discovered a sideways development alongside the $80 degree. Just lately the bulls tried to push the inventory increased, however failed and the inventory is again to the $80 degree.
The lengthy aspect is probably going leaning on the $75 degree, but when Bitcoin have been to fall additional and check the 2026 low of $63.50.
In Abstract
The diversification is actual however it’s not sufficient to offset a 48% drop in crypto quantity with Bitcoin heading decrease. Present yr estimates have misplaced 20 cents on the greenback in 90 days, bills are going up, and the inventory is priced for a crypto restoration that has not arrived. That’s the Zacks Rank #5 in a single sentence.
For these excited about a dealer, try Interactive Brokers (IBKR). The inventory is a Zacks Rank #2 (Purchase) that’s coming off 2026 highs.
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Robinhood Markets, Inc. (HOOD) : Free Inventory Evaluation Report
Interactive Brokers Group, Inc. (IBKR) : Free Inventory Evaluation Report
This text initially printed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
