Robinhood Markets (HOOD) stock tumbled nearly 17% over two trading sessions following its February 10 earnings report for Q4 2025, despite beating earnings per share (EPS) estimates. The company reported EPS of $0.66, surpassing the consensus estimate of $0.63, but revenue of $1.28 billion missed Wall Street's expectation of $1.35 billion.
The most significant disappointment came from its cryptocurrency transaction revenue, which plunged 38% year-over-year to $221 million. This decline was attributed to lower trading volumes across the platform amid broader crypto market weakness. Crypto revenue represented approximately 17% of Robinhood's total Q4 revenue, making its sharp drop a major drag on overall results. The report also highlighted stalled user growth and weaker net deposits in December, with options and equities trading showing softer performance.
Despite the sell-off, Wall Street analysts largely maintained bullish ratings while trimming price targets. Truist Financial analyst David Smith cut his target to $120 from $130, Needham's John Todaro slashed his to $100 from $135, and Piper Sandler's Patrick Moley trimmed his to $155 from $135, all while keeping Buy or equivalent ratings. The average analyst price target sits at $135.46, implying over 90% upside from current levels. "If you can stomach the volatility, HOOD is the best way to play secular growth in retail trading," Moley stated.
A bright spot in the report was the prediction markets business, which saw January volumes hit a record $3.5 billion in contracts. Management emphasized a strategic shift toward diversifying revenue away from volatile crypto trading fees, noting strong growth in Robinhood Gold subscribers (up 58% to 4.2 million), platform assets (up 68% to $324 billion), and margin lending.
In a subsequent development, Cathie Wood's ARK Invest accumulated approximately $46 million worth of HOOD stock, including a single purchase of $33.9 million. This buying contributed to a 7% single-day rally in the stock price to $75.97 on February 13, which analysts also attributed to a technical bullish divergence signal. However, the Chaikin Money Flow indicator remained negative at -0.14, suggesting ARK's buying was an outlier and not supported by broader institutional accumulation.
Technically, the stock remains trapped in a descending channel, with a breakdown below support at $71.91 potentially triggering a further drop toward $40.57—a 43% decline from current levels.
