After putting up explosive gains in 2025, investors are punishing financial services stock Robinhood Markets (NASDAQ: HOOD) this year.
The stock has been weak in general as cryptocurrencies like Bitcoin (BTC) plunge in 2026. However, Robinhood’s latest earnings report, released on Feb. 10, accelerated the stock’s downward trend. Shares plummeted by approximately 9% the next day as markets reacted to the post.
Shares of HOOD have now fallen nearly 50% from their all-time high closing price in October 2025. Given this backdrop, could there now be a significant buy-the-dip opportunity ahead? Let’s dive into the fintech firm’s newest financials to assess this question.
Crypto Miss Weighs on Robinhood’s Q4 Earnings
In Q4 2025, Robinhood recorded revenue of $1.28 billion, a 27% year-over-year (YOY) increase. This missed analyst expectations of $1.32 billion. The biggest detractor from Robinhood’s revenue compared to expectations was sales generated from crypto transactions, which came in at $221 million, down 38% YOY, and well short of estimates near $248 million.
Despite this, the company did manage to beat estimates for earnings per share (EPS), which fell by 35% YOY to 66 cents but exceeded estimates of 63 cents. Note that this drop happened as the firm received a 47-cent tax benefit that inflated its Q4 2024 EPS.
Overall, revenue rose by 52% in 2025. Meanwhile, comparable adjusted operating expenses and share-based compensation (SBC) rose just 22%. At $305 million, SBC was essentially unchanged compared to 2024—a good sign showing that Robinhood is not inflating its profitability by paying employees with stock.
These factors helped the company’s full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin move to 56.4%. That figure increased by an impressive 800 basis points versus 2024.
Robinhood does not provide revenue guidance. However, at the midpoint, it expects adjusted operating expenses and SBC to increase by 18%. As over half of this expense growth is going toward new and scaling businesses, the firm’s outlook here isn’t concerning. While not official guidance, in his earnings call comments, new Chief Financial Officer Shiv Verma said that the company expects revenue growth to outpace increasing expenses.
Despite Valuation Dependence, Deposits Provide Strength
Robinhood is an interesting financials sector stock with a lot of things going for it. However, it is influenced by crypto and equity market volatility in a way that few other companies are.
In 2025, transactions across options, equities, and crypto accounted for 52% of total revenue, slightly less than 53% in 2024. Crypto alone accounted for 20%, compared to 21% in 2024. Because equity and crypto transaction revenues tend to fall alongside falling equity and crypto valuations, Robinhood is somewhat dependent on valuations rising. Over the long-term, equity and crypto valuations have shown a strong tendency to rise, providing an important tailwind for the company.
Additionally, despite ups and downs in markets, Robinhood’s options trading revenue has risen nine quarters consecutively. In part, that can be attributed to options, which allow traders to make money when valuations rise or fall.
Net deposits increased by 35% in 2025, showing that Robinhood is driving asset growth not just through valuation increases but also through investors depositing new funds. Prediction markets are also an important growth area, with trading volumes doubling in Q4 and the company labeling it its foremost growth priority going forward.
Analysts Eye Big Time Upside in HOOD After Fall
Wall Street didn’t react positively to Robinhood’s report. MarketBeat tracked several analysts that lowered their price targets by 10% or more, and two that lowered their targets by 20% or more. Still, the MarketBeat consensus price target on Robinhood stands near $127, implying around 64% upside over the next 12 months. At almost $134, the average of targets issued or updated after the company’s report comes in even higher, suggesting the stock could rise by approximately 72%.
Overall, there could be a significant long-term opportunity in Robinhood after the stock’s massive fall. Still, downside moves in crypto and equity markets will continue to be large risk factors for HOOD. Additionally, a lower federal effective funds rate could pressure Robinhood’s net interest revenue if the Federal Reserve resumes its rate-cutting cycle this year.
Going forward, the firm’s ability to generate strong deposit growth and diversify its revenue streams will be important to watch. Notably, Robinhood is targeting over 20% net deposit growth in 2026.
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The article "Why Robinhood's Nearly 50% Slide Is a Buy-the-Dip Opportunity" first appeared on MarketBeat.
