Robinhood ($90.66) Buys Back Half Its Gap as $15.7B Deposits Offset a Crypto Slump — Upside to $105

Robinhood Markets (NASDAQ: HOOD) traded at $90.66 on Wednesday morning, down $3.90 or 4.1% from Tuesday’s close of $94.56, after a session that opened at $89.22, printed a low of $86.42 and has since bounced to an intraday high of $92.25. The stock dropped 7.36% to $87.60 in after-hours trading Tuesday following its third-quarter report and was indicated at $86.31 before Wednesday’s open. From that premarket level, HOOD has recovered 4.9%, erasing more than half of the overnight gap.

The reaction captures a split verdict. Robinhood delivered record revenue of $1.42 billion, up 12% from a year earlier, record trading volumes in equities, options and prediction markets, record net deposits trends and a record 5.2 million Gold subscribers. It also missed on diluted earnings per share, which fell 16% to $0.51 against the $0.56 to $0.57 the market expected, posted a 55% collapse in crypto revenue to $120 million and reported transaction revenue of $867 million against an $879 million estimate. Management also flagged tighter trading spreads at the start of the fourth quarter.

The thesis for the stock is narrow and specific. Robinhood’s core engine is growing faster than its headline numbers suggest, and the EPS miss came mostly from a higher tax rate, a $67 million paper loss on its venture fund and a crypto cycle the company does not control. Pretax income was $625 million, essentially flat against $634 million a year earlier, while adjusted EPS of $0.60 beat the $0.55 consensus. The market is pricing the drop in crypto and the slowdown in securities lending as structural. The operating data argue they are cyclical.

The valuation backdrop matters. At $90.66, Robinhood carries a market capitalization of $81.51 billion and a trailing price-to-earnings ratio of 41.87. The stock is down 19.8% year to date, 39.7% below its 52-week high of $150.47, and 42.7% above its 52-week low of $63.52. It entered the report down 14.72% for 2026, on pace for its worst annual performance since 2022.

The forecast turns on whether the $86.42 gap low holds. A close above $94.56 fills the gap and signals the market has absorbed the miss. A break below $86.42 would put the post-earnings drawdown on a path toward the low $80s. With October net deposits already above $13 billion month to date, the fundamental floor looks firmer than the price action implies, but the stock needs crypto to stabilize and fourth-quarter trading spreads to hold before it can rebuild a premium multiple.

Record $1.42 Billion in Revenue Still Missed by $10 Million

Robinhood’s third-quarter release showed total net revenues of $1,424 million, up 12% from $1,274 million a year earlier and up 9% from $1,308 million in the second quarter. That was a record for any quarter in the company’s history, but it landed $10 million short of the $1.43 billion consensus. For a stock trading at more than 40 times trailing earnings, a revenue miss of any size is a problem.

The revenue mix shows where the growth is and where it is not. Transaction-based revenues rose 19% to $867 million, up 12% sequentially from $776 million. Net interest revenues fell 9% to $415 million from $456 million, although they rose 7% from the second quarter’s $389 million. Other revenues jumped 61% to $142 million from $88 million, driven by Trump Account service revenues and Gold subscription fees.

Profitability moved the wrong way on a reported basis. Net income fell 14% to $476 million, and net income attributable to Robinhood fell 16% to $468 million. Diluted EPS dropped to $0.51 from $0.61 a year earlier and from $0.62 in the second quarter. The net margin compressed to 33% from 44% a year ago and 44% in the second quarter.

Adjusted figures tell a more stable story. Adjusted net income, a new non-GAAP measure introduced this quarter, fell 3% to $550 million, and adjusted EPS fell 3% to $0.60, ahead of the $0.55 estimate. Adjusted EBITDA rose 9% to $808 million, with an adjusted EBITDA margin of 57%, against 58% a year earlier and 57% in the second quarter.

The gap between the GAAP and adjusted numbers is the heart of the debate. The $0.09 difference between $0.51 diluted EPS and $0.60 adjusted EPS comes mostly from $67 million of unrealized losses, or $0.07 a share, on the mark-to-market of Robinhood Ventures Fund I. Those are paper losses on private investments, not a decline in the operating business. Investors who focus on adjusted EPS see a beat. Investors who focus on GAAP EPS see a 16% decline.

Nine-month results show the business is still growing on a year-to-date basis. Revenue for the first nine months of 2026 reached $3,799 million, up 19%, net income rose 9% to $1,395 million, and adjusted EBITDA climbed to $2,083 million from $1,761 million. Diluted EPS for the nine months stands at $1.51, up from $1.39.

A 24% Tax Rate and Venture Marks Did the EPS Damage

The single biggest driver of the GAAP EPS decline was not revenue, expenses or crypto. It was taxes. Robinhood’s provision for income taxes jumped 91% to $149 million from $78 million a year earlier. On pretax income of $625 million, that implies an effective tax rate of 23.8%, compared with 12.3% on $634 million of pretax income in the third quarter of 2025.

Run the math on a flat tax rate and the picture changes. If Robinhood had paid the same 12.3% rate it paid a year ago, net income would have been $548 million rather than $476 million, and diluted EPS would have been $0.59 instead of $0.51. The 11.5-point jump in the tax rate cost the company $72 million, or $0.08 a share, more than the entire gap between the $0.51 print and the $0.56 to $0.57 expected.

The second driver was other income. Robinhood booked $60 million of other expense in the quarter, against $1 million a year earlier and a $135 million gain in the second quarter. The swing came from $67 million of unrealized and realized losses on its Robinhood Ventures funds, which the company carries at fair value. In the second quarter, those same investments produced $129 million of gains. Investors are now seeing quarterly earnings swing by nearly $200 million on the marks of a private-markets vehicle.

Pretax income tells the clean story. At $625 million, it was down 1% from $634 million a year earlier and down 12% from $709 million in the second quarter. Strip out the $60 million other expense line, and operating income, total revenue minus operating expenses, came in at $685 million, up 8% from $635 million a year ago.

That is not a broken business. It is a business whose operating income is growing high single digits while two non-operating lines, taxes and venture marks, are creating noise in the bottom line. The tax rate normalization reflects the company becoming consistently profitable and using up deferred tax benefits, which means the higher rate is likely to persist. The venture marks will keep swinging with private-market valuations.

The market response suggests investors are pricing the higher tax rate as permanent, which is reasonable, and the venture marks as a recurring drag, which is less clear. At a normalized 24% tax rate and no venture gains or losses, Robinhood’s annualized operating income of $2.74 billion would translate into net income of $2.08 billion, or $2.28 per diluted share on 911 million shares.

Crypto Revenue Down 55% While Event Contracts Ran 6x Higher

The revenue mix inside the transaction line shows two businesses moving in opposite directions. Crypto revenue fell 55% to $120 million from a year earlier. Crypto notional trading volume dropped 38% to $50 billion, with Robinhood App volume down 48% to $21 billion and Bitstamp volume down 28% to $29 billion. A prolonged slowdown in crypto markets pressured trading activity, with Bitcoin trading near $81,000 on Wednesday, 35.5% below its October 2025 record of $126,080.

Event contracts went the other way. Revenue from prediction markets rose more than sixfold to $173 million, overtaking crypto as a revenue line for the second straight quarter. Event contracts traded rose more than sevenfold to a record 16.4 billion. Rothera, the joint venture with Susquehanna International Group, reached more than $100 million in annualized revenue in its first full quarter of operation, with more than 6.4 billion contracts traded since launch.

The swap matters for the investment case. In 2025, crypto was the swing factor in Robinhood’s results, rallying with Bitcoin and collapsing with it. In 2026, prediction markets have replaced that cyclical exposure with a growth line tied to sports, elections and economic events rather than token prices. Event contracts revenue of $173 million against crypto revenue of $120 million means a further 50% drop in crypto would cost $60 million per quarter, while event contracts are compounding at multiples.

There are cracks. Prediction markets grew more slowly than expected in September, and the market flagged that transaction volume in that segment was down 38% in the month. Robinhood’s own risk disclosures note that ongoing regulatory enforcement and potential changes in federal or state law could prevent it from offering certain event contracts, and that it has already stopped offering some contracts under threatened state enforcement. The company also announced earnings contracts in its prediction markets hub, extending the product into a regulatory gray zone.

Crypto expansion continues despite the slump. Robinhood launched crypto trading in the UK and received authorization from the Dubai Financial Services Authority to operate across all ten DFSA-approved asset classes, with a rollout planned for 2027. Robinhood Chain, in its first quarter on mainnet, generated more than $80 billion in decentralized exchange volume and more than $50 million of chain fees, becoming a top-five chain by revenue and volume.

The crypto drag is unlikely to reverse in the fourth quarter. Bitcoin’s October decline, ETF outflows of $635.5 million on October 22 and a negative Coinbase premium all point to subdued retail crypto activity. The swing factor for Robinhood’s fourth quarter is whether event contracts and options can offset another weak crypto quarter.

Options at $399 Million and Equities at $121 Million Set Records

The core brokerage engine is running at full speed. Options revenue rose 31% to $399 million, the largest single line in transaction revenue. Options contracts traded rose 48% to a record 905 million. Equities revenue rose 41% to $121 million, on equity notional trading volume of a record $992 billion, up 53% from a year earlier.

Market share gains drove that engagement. Active trader activity reached new highs in the third quarter, with record volumes in equities, options and prediction markets and record margin balances. The margin book rose 59% to a record $22.1 billion, which feeds both trading activity and net interest revenue.

The volume growth outpaced revenue growth, which is the take-rate problem the market is focused on. Equity notional volume rose 53%, but equities revenue rose 41%. Options contracts rose 48%, while options revenue rose 31%. Robinhood is capturing a smaller slice of each trade, which reflects competitive pricing, a shift toward larger and more sophisticated traders who negotiate better execution, and narrower spreads in the market overall.

Management made that explicit on the call, warning of tighter trading spreads at the start of the fourth quarter. Trading volume since the start of October came in below what the market had modeled, and the take rate also fell short. That combination is why the stock dropped more than the revenue miss alone would justify.

The product pipeline aims squarely at active traders. At the HOOD Summit in September, Robinhood announced 17 new products and features, including Robinhood Agents and Agent Apps, 24/7 trading in select US equities, perpetual futures for eligible US customers and earnings contracts in prediction markets. Around 200,000 customers have opened Agentic Trading Accounts, generating more than $1.6 billion in notional volume.

Perpetual futures and 24/7 equity trading are the two products most likely to lift volumes in 2027, because they extend trading hours and leverage for the most active segment of the customer base. They also expand the regulatory surface area. Robinhood’s risk factors list perpetual futures, stock tokens and onchain lending among the products carrying regulatory, litigation, contractual, operational and reputational risk.

Net Interest Revenue Fell 9% on Weaker Securities Lending

Net interest revenue declined 9% to $415 million, primarily due to lower securities lending activity and lower short-term interest rates, partially offset by growth in interest-earning assets. On a sequential basis, net interest revenue rose 7% from $389 million, which shows the line is recovering from its second-quarter low.

Securities lending was the biggest drag. Weaker demand to borrow stocks weighed on that business, as fewer IPOs and less disagreement among investors over individual companies reduced short-selling demand. When hedge funds short fewer stocks, Robinhood earns less from lending out customer shares. That is a market-structure effect tied to the 2026 equity tape, not a change in Robinhood’s competitive position.

The interest rate picture is improving for the company. Lower short-term rates hurt the year-over-year comparison, because the Fed was still cutting into late 2025. The Fed then raised rates by 25 basis points in September 2026, taking its target range to 3.75% to 4.00%, and futures price an 84.4% chance of another hike in December. Every Fed hike lifts the yield Robinhood earns on customer cash and margin loans.

Interest-earning assets are growing fast. The margin book rose 59% to $22.1 billion. Cash and deposits rose 43% to a record $20.4 billion. Cash sweep, the off-balance-sheet cash moved to partner banks, fell 9% to $32.3 billion, partly because Robinhood moved more than $6 billion of sweep balances into customer free credit balances in February to fund margin lending growth.

That shift is a margin decision. By funding margin loans with customer cash rather than sweeping it to banks, Robinhood captures more of the spread between what it pays customers and what it charges borrowers. The record $22.1 billion margin book is the result.

The rate outlook makes net interest revenue the most likely line to surprise positively over the next two quarters. If the Fed hikes in December and margin balances keep growing at 59%, net interest revenue could return to year-over-year growth by the first quarter of 2027. The Fed decision on Wednesday afternoon, and Chair Kevin Warsh’s comments on December, matter directly to that line.

$396 Billion in Platform Assets and $13 Billion of October Deposits

The asset base is the strongest part of the report. Total platform assets rose 19% to $396 billion, driven by continued net deposits and higher equity valuations, partially offset by lower crypto valuations. Net deposits were $15.7 billion in the quarter, an annualized growth rate of 17% relative to platform assets at the end of the second quarter. Over the past 12 months, net deposits reached $71.0 billion, a growth rate of 21% against platform assets a year earlier.

The fourth quarter started faster. October net deposits already topped $13 billion month to date, including $6 billion from the Dell family’s contribution to Trump Accounts. Even excluding the Dell contribution, $7 billion in under four weeks puts October on pace to match the monthly average of the third quarter.

Trump Accounts are becoming a structural growth channel. The US Treasury launched automatic enrollment, establishing accounts for nearly 70 million children nationwide. Susan and Michael Dell’s $6.25 billion pledge means 25 million children have $250 invested. Robinhood earns service revenue on those accounts, which contributed to the 61% jump in other revenues to $142 million, and the accounts bring a new generation of customers onto the platform at birth.

Customer growth is steady rather than explosive. Funded customers rose by 1.9 million, or 7%, to 28.7 million. Investment accounts rose by 2.5 million, or 9%, to 30.4 million. Average revenue per user rose 5% to $200, narrowly below the $201.09 expected.

Retirement assets are compounding. Robinhood Retirement assets under custody rose 51% to a record $36.6 billion, as IRA matching incentives pull long-term savings onto the platform. Trust accounts hold more than $300 million with an average account size above $400,000, a sign that Robinhood is reaching wealthier households than its retail-trader reputation suggests.

That deposit trajectory is the most important counterweight to the take-rate concern. A brokerage growing assets at 17% to 21% a year will grow revenue over time even if its take rate on trades compresses, because more assets generate more interest income, more subscription revenue and more trading capacity. The market is focused on the next quarter’s trading spreads. The deposit data point to the next three years.

5.2 Million Gold Subscribers and a 1.3 Million Gold Card Base

The recurring revenue business is growing faster than the transaction business. Robinhood Gold subscribers rose by 1.3 million, or 34%, to a record 5.2 million. That represents an 18% adoption rate across the funded customer base and roughly 40% adoption among new customers, which means Gold is becoming the default product for anyone joining the platform.

The Gold Card extends that relationship into payments. The card grew to 1.3 million customers, with more than $19 billion in total annualized payment volume in the third quarter. Card growth is also driving costs: the provision for credit losses rose 173% to $71 million as the credit card loan book expanded, and the company bought $4.68 billion of credit card receivables through its funding trust in the quarter, against $1.39 billion a year earlier.

Robinhood Banking is scaling. The product holds nearly $5 billion in deposits from more than 350,000 funded customers, and roughly 40% of those customers have signed up for direct deposit. Direct deposit is the stickiest relationship in retail finance, because it routes a customer’s paycheck through Robinhood before any other institution sees it.

Managed money is small but growing. Robinhood Strategies, the robo-advisory product, reached 350,000 funded customers with more than $2 billion in assets under management.

The company now counts 14 business lines generating $100 million or more in annualized revenue, with Rothera added this quarter. That diversification is the strongest answer to the bear case that Robinhood is a cyclical trading app. Options, equities, crypto, event contracts, net interest, Gold subscriptions, the card, retirement and other lines each contribute meaningful revenue, and no single line other than options accounts for more than 30% of the total.

The recurring lines carry higher margins and lower volatility than trading revenue. As Gold, banking, card and advisory revenue grow from a combined base inside the $142 million other revenue line and parts of net interest income, they reduce the company’s sensitivity to the trading cycle that produced Wednesday’s sell-off. The market has not yet assigned a separate value to that recurring base, which is part of why the stock trades on quarterly volume trends.

Operating Expenses Up 16% as Credit Costs Jump 173%

Total operating expenses rose 16% to $739 million from $639 million a year earlier, outpacing revenue growth of 12%. The increase was driven by higher provisions for credit losses as the card loan book grows, expenses related to Trump Accounts and Rothera, and marketing and growth investments. Operating expenses equaled 52% of revenue, against 50% a year ago.

The line-by-line breakdown shows where the money went. Operations expense rose 139% to $79 million, reflecting the cost of running Trump Accounts and Rothera. The provision for credit losses rose 173% to $71 million. Brokerage and transaction costs rose 21% to $68 million. Technology and development rose 7% to $254 million. Marketing rose 2% to $104 million. General and administrative expense fell 12% to $163 million.

Adjusted operating expenses and stock-based compensation, the company’s preferred cost measure, rose 8% to $664 million. Share-based compensation was $80 million, up from $78 million. Management lowered the top end of its 2026 outlook for adjusted operating expenses and SBC by $25 million, to a range of $2.675 billion to $2.75 billion, citing ongoing efficiency gains. Through nine months, the company has spent $1,912 million on that measure, which implies fourth-quarter spending between $763 million and $838 million.

The credit provision is the cost line to watch. At $71 million a quarter and growing, it now equals 5% of revenue, up from 2% a year ago. The card business is profitable, but its loss provisions rise with the loan book, and a weaker consumer would push them higher. Robinhood excludes the provision from its adjusted expense guidance, which means the guidance does not capture the fastest-growing cost line.

Capital allocation slowed. Share repurchases totaled just $25 million in the quarter, buying 0.2 million shares at an average of $105. Since the program began in the third quarter of 2024, Robinhood has repurchased 27 million shares for $1.3 billion at an average price of $48. Year to date, buybacks total $689 million. The company issued $2.7 billion of long-term borrowings in 2026, including convertible notes, and holds $5.8 billion in cash, up from $4.3 billion a year earlier.

The slowdown in buybacks at $105 a share, against a $48 average since 2024, suggests management saw the stock as fully valued at those levels. With the shares now at $90.66, a step-up in repurchases in the fourth quarter would signal management sees value after the sell-off.

AI Agent Liability and Event Contract Rules Add New Risk

Robinhood added new warnings to its quarterly filing that the market noticed. The company said its AI agents could execute unintended trades and expose the platform to new regulatory and legal risks. Robinhood opened its platform to customer-built AI agents in May and began rolling out an in-app version last month, and it now acknowledges that courts or regulators might not uphold customer agreements that assign responsibility for agent trades to the customer.

That is the first time a major US broker has flagged agentic trading as a potential source of liability in a 10-Q risk factor. With 200,000 Agentic Trading Accounts and $1.6 billion in notional volume, the exposure is small today. The risk is that a single high-profile error, an agent executing a large unauthorized trade during a volatile session, could produce litigation and regulatory action that sets precedent for the entire industry.

Prediction markets carry their own regulatory overhang. Robinhood’s risk factors state that ongoing enforcement actions and potential changes in federal or state law could prevent it from offering event contracts, and that it has already stopped offering certain new contracts under actual or threatened state enforcement. With event contracts now generating $173 million a quarter, more than crypto, a regulatory setback in a large state would hit a growth line the market is counting on.

Payment for order flow remains a structural risk. The company’s reliance on transaction-based revenue, including PFOF, exposes it to new regulation or bans on the practice. Any change to equity market structure rules would affect the options and equities revenue lines that are currently driving growth.

The fourth-quarter outlook adds near-term risk. Management’s comments on tighter spreads at the start of the quarter, combined with October trading volume running below expectations, mean fourth-quarter transaction revenue could fall short of models built on the third quarter’s record pace. The take rate is the key variable, and it is moving against the company.

Leadership is in transition. The quarter included $2 million of stock-based compensation tied to the CFO transition, and Shiv Verma is now finance chief. Management continuity matters for a company executing on 17 new product launches and a global expansion into the UK and Dubai. None of these risks is new in isolation, but the AI agent disclosure and the event contract language arriving in the same filing as a profit miss gave the market a reason to apply a wider discount.

Valuation: 38 Times Annualized Adjusted EPS After the Sell-Off

At $90.66, Robinhood’s market capitalization of $81.51 billion is based on 793 million Class A shares and 108 million Class B shares, a total of 901 million. The stock trades at 41.87 times trailing earnings on a GAAP basis.

Forward-looking measures give a clearer read. Annualizing the third quarter’s adjusted EPS of $0.60 produces $2.40, which puts the stock at 37.8 times. Annualizing revenue of $1.424 billion produces $5.70 billion, a price-to-sales ratio of 14.3 times. Adjusted EBITDA of $808 million annualizes to $3.23 billion. With $5.8 billion in cash and $2.66 billion in long-term borrowings, enterprise value stands near $78.5 billion, or 24.3 times annualized adjusted EBITDA.

On the normalized basis calculated earlier, annualized operating income of $2.74 billion taxed at 24% produces $2.28 per diluted share, which puts the stock at 39.8 times. Every way of measuring it lands in the high 30s to low 40s on earnings.

Those multiples price Robinhood as a growth platform rather than a broker. Traditional brokers trade at far lower multiples of earnings, because their revenue grows with assets and rates rather than with product launches. Robinhood’s premium rests on three things: 17% to 21% annualized asset growth, a pipeline of new revenue lines reaching $100 million in annualized revenue, and operating leverage that has kept adjusted EBITDA margins at 57%.

The sell-off has compressed that premium. At Tuesday’s intraday high of $96.45, the stock traded at 40.2 times annualized adjusted EPS. At the 52-week high of $150.47, it traded at more than 60 times. At $90.66, it is the cheapest it has been on that measure since the first half of the year.

The downside scenario prices a deeper reset. If fourth-quarter adjusted EPS drops to $0.50 on tighter spreads and weak crypto, annualized adjusted EPS falls to $2.00, and a 35 times multiple implies $70, close to the 52-week low of $63.52. If adjusted EPS holds at $0.60 and the market restores a 45 times multiple as deposits keep compounding, the stock would trade at $108, near the $105 average price of the third-quarter buyback.

The stock’s beta of 2.35 means it moves more than twice as much as the market. With the Fed deciding on Wednesday afternoon and Microsoft and Alphabet reporting after the close, any broad move in risk appetite will be amplified in HOOD’s price.

Technical Map: $86.42 Gap Low Below, $94.56 Gap Fill Above

HOOD’s chart after the report shows a gap down being partially filled. The stock closed Tuesday at $94.56 after a 1.85% gain in the regular session, traded as high as $96.45 intraday on Tuesday ahead of the report, fell to $90.90 within six minutes of the release, slid to $87.60 in after-hours trading and was indicated at $86.31 before Wednesday’s open.

Wednesday’s session opened at $89.22, dropped to a low of $86.42, and rallied to a high of $92.25 before settling near $90.66. Volume crossed 13 million shares in the first hour. That bounce of $5.83 from the low, or 6.7%, is meaningful for a stock that gapped down on earnings, because it shows dip buyers absorbing the supply from overnight sellers.

The $86.42 low is the key support. It marks the bottom of the post-earnings panic, and a break below it would signal the gap is extending rather than filling. Below that, the next reference zone sits in the low $80s, and the 52-week low of $63.52 is the deep floor. A close below $86.42 would also put the stock below the $88 to $89 range where it opened Wednesday.

Resistance begins at $92.25, Wednesday’s intraday high. Above that, $94.56, Tuesday’s close, marks the full gap fill. A close above $94.56 would signal the market has fully absorbed the miss. Tuesday’s pre-earnings high of $96.45 is the next level, followed by $105, the average price of the third-quarter buyback, and $113, near where the stock started 2026.

The distances frame the setup. From $90.66, the downside to $86.42 is $4.24, or 4.7%. The upside to $94.56 is $3.90, or 4.3%, and to $105 is $14.34, or 15.8%. The near-term risk is balanced, with more room on the upside if the gap fills and the market’s tone improves after the Fed.

The longer chart remains damaged. The stock is down 39.7% from its 52-week high of $150.47 and has lost 19.8% year to date. A sustained recovery needs a series of higher lows above $86.42 and a close above $105 to break the downtrend that has defined 2026. Until then, rallies are recoveries inside a downtrend rather than the start of a new uptrend.

Competition and Sector: Prediction Markets, Crypto and Discount Brokers

Robinhood competes on three fronts, and each moved differently this quarter. In traditional brokerage, it competes with Charles Schwab (NYSE: SCHW) and Interactive Brokers (NASDAQ: IBKR) for active traders and long-term assets. Robinhood’s record $992 billion in equity notional volume and 905 million options contracts reflect market share gains against both. Its 21% trailing net deposit growth rate is far above what large incumbent brokers typically report, and its retirement assets of $36.6 billion, up 51%, show it is winning long-term savings that once went to established platforms by default.

In crypto, Robinhood competes with Coinbase (NASDAQ: COIN) and offshore exchanges. Its crypto revenue fell 55% and its app volume dropped 48%, a steeper decline than the 28% drop on Bitstamp, its institutional exchange. With Bitcoin at $81,000 and spot ETF flows volatile, crypto platforms across the sector face the same retail slowdown. Robinhood’s diversification makes it less exposed to crypto than pure-play exchanges, which is a relative advantage in this phase of the cycle.

In prediction markets, Robinhood competes with dedicated platforms, and it has moved fast. Event contracts revenue of $173 million and 16.4 billion contracts traded put Robinhood among the largest venues in the category. The Rothera joint venture with Susquehanna gives it its own exchange and control over pricing and product selection, which reduces reliance on third-party venues.

In fintech and banking, Robinhood competes with SoFi Technologies (NASDAQ: SOFI) for younger customers seeking a single app for banking, investing and credit. SoFi shares rose 15% on Tuesday afternoon to $16.65 after its own quarterly report, a reminder that the market is willing to reward fintech names that deliver. Robinhood’s banking product, with nearly $5 billion in deposits and 350,000 customers, is smaller than SoFi’s lending franchise but growing from a larger brokerage base.

The sector backdrop is mixed. Higher interest rates support net interest income across brokers. Weaker crypto prices hurt platforms with token exposure. Market-structure debates around payment for order flow, prediction markets and AI-driven trading affect Robinhood more than its peers, because it leads in all three. The competitive position is strong, but the regulatory exposure is unusually concentrated.

Robinhood Stock Forecast: $86.42 Floor, $105 Upside on a Gap Fill

The forecast for HOOD rests on whether investors treat the third-quarter miss as a crypto-and-tax problem or a growth problem. The data favor the first reading. Pretax income was flat at $625 million, operating income grew 8% to $685 million, adjusted EPS of $0.60 beat the $0.55 consensus, and the miss on diluted EPS came from a tax rate that rose to 23.8% from 12.3% and $67 million of venture marks. Revenue hit a record $1.42 billion, platform assets reached $396 billion, and October net deposits already exceed $13 billion.

The base case is a range between $86.42 and $96.45 through the end of the week. The market digests the miss, the Fed’s 2:00 p.m. decision and Warsh’s comments on December shape broad risk appetite, and HOOD trades with high beta around the gap. Investors wait for November trading data to judge whether the fourth-quarter spread compression is temporary.

The bullish case targets $105, the average price of the third-quarter buyback, and then $113. It requires a close above $94.56 to fill the gap, a stabilization in Bitcoin above $82,000, a Fed path that keeps rates high enough to support net interest revenue, and early evidence that October’s $13 billion of deposits and record options volumes are translating into fourth-quarter revenue. A step-up in buybacks at current prices would add support.

The bearish case targets the low $80s. It requires a break of $86.42, further crypto weakness that pushes Bitcoin below $79,000, evidence that fourth-quarter trading spreads keep compressing, and a regulatory headline on event contracts or AI agents. Under that scenario, a 35 times multiple on $2.00 of annualized adjusted EPS points to $70.

The verdict is cautiously bullish on a three-to-six-month view. The stock trades at 37.8 times annualized adjusted EPS, its lowest multiple of the year, while deposits compound at 17% to 21%, Gold subscribers grow 34%, retirement assets grow 51%, and event contracts have replaced crypto as the cyclical revenue line. The near-term risks, tighter spreads, weak crypto and a higher tax rate, are real but priced. HOOD at $90.66 is a buy on dips toward $86.42 with a stop below that low, and a close above $94.56 opens $105.

That's TradingNEWS