Robinhood Markets (HOOD) is a commission-free monetary providers platform that constructed its status 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 right now’s Bear of the Day.
About Robinhood
Headquartered in Menlo Park, CA, Robinhood is a monetary providers firm that allows 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 complete 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 Type 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 offender was crypto. Crypto notional buying and selling quantity of $66 billion fell 48% 12 months over 12 months as Bitcoin retreated and informal merchants stepped away from the asset class. That single line merchandise swung the complete income image.
The underlying enterprise confirmed real power in different areas. Gold subscribers reached 4.3 million, up 36% 12 months over 12 months. Retirement property below custody hit $27.4 billion, up 90%. Internet deposits grew at a 20% annualized charge. Adjusted EBITDA of $534 million grew from $470 million a 12 months 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 12 months 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 12 months fell from $2.81 to $2.49 over the identical window.
9 analysts revised the present 12 months 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 accomplished and the inventory is priced for a restoration that relies upon closely on crypto sentiment.
The Bitcoin Drawback
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 quick and the expense base doesn’t shrink with it.
Administration is investing a further $100 million in 2026 to construct the Trump Accounts person 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 12 months, the inventory has discovered a sideways development alongside the $80 stage. Lately the bulls tried to push the inventory increased, however failed and the inventory is again to the $80 stage.
The lengthy aspect is probably going leaning on the $75 stage, but when Bitcoin had been to fall additional and take a look at 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 12 months 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 concerned with a dealer, take a look at 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 revealed 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.
