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HOOD Stock Retreats After 2025 Rally: Should You Stay Invested?
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Key Takeaways
Robinhood has slid 25% YTD in 2026 after a record 2025 rally, as crypto activity weakened.
Robinhood is rolling out AI agents, Social beta and a Platinum Card, plus steps toward Singapore entry.
HOOD adds buybacks and diversification, MIAX stake, Bitstamp and WonderFi deals amid probes and volatility.
After a record-breaking rally in 2025, shares of Robinhood Markets (HOOD - Free Report) have pulled back sharply in 2026, falling 25% year to date. The decline appears to reflect profit-taking after last year’s steep run-up, concerns over the stock’s elevated valuation and weaker crypto-related activity.
Following the slowdown in crypto trading volumes in the first quarter of 2026, which weighed on results and led to a weaker-than-expected performance, the softness has persisted in the ongoing quarter. This continued weakness has pressured investor sentiment, even as Robinhood maintains solid momentum in equities, options, prediction markets and net deposits.
In comparison, shares of HOOD’s close peers, Charles Schwab (SCHW - Free Report) and Interactive Brokers (IBKR - Free Report) , have fared better. Even the industry to which the stock belongs has declined just 3.4% so far this year.
YTD Price Performance
Image Source: Zacks Investment Research
After such a weak performance, the key question is whether investors should pay attention to the prevailing bearish sentiment or look past the near-term concerns and use the current dip as a buying opportunity. To answer that, it is important to assess Robinhood’s fundamentals, growth drivers and market-related catalysts before making an investment decision.
Robinhood: Major Factors to Consider
Product Innovation & Global Presence: Robinhood is boosting its growth through aggressive product innovation and global expansion, positioning itself as a next-generation fintech ecosystem. Earlier this week, the company announced the rollout of AI agents for trading and credit card purchases. The move highlights the company’s broader strategy of bringing institutional-style automation tools to everyday consumers.
Further, this year, it has unveiled the beta version of its in-app community feature, Robinhood Social, and a new Robinhood Platinum Card. The company has also received in-principle approval to set up the brokerage business in Singapore, bringing it closer to entering one of Asia’s key financial hubs.
Major 2025 launches include Robinhood Cortex, an AI assistant that allows users to build custom indicators, analyze markets and access real-time AI-driven news insights. The Legend platform enhances advanced trading with futures access, short selling, simulated options returns and nearly 24/5 index options trading.
Banking services and a Gold credit card extend Robinhood’s reach into personal finance, aiming to become a digital banking alternative. AI integration and rapid product rollouts are driving engagement and monetization through premium tiers. Social and community features aim to boost retention and virality, while expanded trading tools attract both retail and institutional users.
Robinhood is expanding globally by combining traditional finance with digital assets. Its initiatives include tokenized U.S. stocks and ETFs in Europe, broader crypto services, a proprietary blockchain, future banking products, and expansion into Canada and Asia-Pacific through new offices and planned acquisitions.
Business Diversification Efforts: Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to expand its market reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income, which came down to 59% in 2025.
Robinhood is betting big on the lucrative prediction markets and, in a partnership with Susquehanna International Group, acquiring a 90% stake in MIAX Derivatives Exchange (a CFTC-licensed derivatives exchange). Through this, the company intends to launch a dedicated futures and derivatives exchange and clearinghouse by 2026. In the first quarter of 2026, events contract revenues were the primary driver that supported HOOD’s transaction-based revenues.
Robinhood’s other initiatives underscore its ambition to evolve into a full-scale financial services platform. In 2025, the company acquired TradePMR, an asset under administration custodian and portfolio management platform for Registered Investment Advisors, strengthening credibility in wealth management and positioning it to compete directly with incumbents like Schwab.
Likewise, Interactive Brokers and Schwab have been expanding their product suites aggressively. IBKR has added daily options on European indices and broadened crypto trading capabilities, including stablecoin funding and staking. Interactive Brokers also launched "Connections," a proprietary feature integrating global markets to provide clients access to stocks, options, futures, currencies and bonds across more than 160 markets worldwide.
Schwab acquired Forge Global Holdings, Inc. This aligns with the company’s strategy to offer private market capabilities to retail and advisor clients. It is rolling out spot crypto trading and has launched the Teen Investor account to reach younger clients and support longer-duration relationships.
Strong Balance Sheet: Robinhood is on solid ground, with significant cash reserves. As of March 31, 2026, it reported cash and cash equivalents of $5 billion.
In March, HOOD announced a fresh $1.5 billion share repurchase authorization (to be completed over the next three years). The company had initially launched a $1 billion share repurchase program in May 2024, which was later expanded by another $500 million in April 2025. The new buyback program underscores management’s confidence in the company’s financial position and long-term growth prospects.
Focus on Crypto: Robinhood’s crypto push, through tokenization, platform upgrades and EU expansion, is expected to support revenue growth and improve cost efficiency over time. The company is pursuing MiCA licenses to offer crypto services across the European Economic Area, while its Bitstamp acquisition and pending WonderFi deal further strengthen its digital assets strategy.
Bitstamp’s core spot exchange, offering more than 85 tradable assets, has significantly strengthened Robinhood’s crypto product suite. WonderFi brings two of Canada’s leading regulated crypto platforms, Bitbuy and Coinsquare, which will enable Robinhood to provide trading, staking and custody services in the country.
As HOOD expands its crypto offerings, revenues could benefit from stronger investor interest in digital assets. A broader platform may also create cross-selling opportunities across subscriptions, cash management and other services. Over time, favorable regulatory developments and product enhancements, including token support, wallet features, staking or earn programs where permitted and wider international availability, could boost transaction-based revenues and user engagement. However, recent crypto sell-offs and volatility may continue to weigh on trading activity and remain a near-term drag on the top line.
Litigation & Probes: Robinhood operates in a heavily regulated market and continues to expand into products that can draw scrutiny. In December 2025, Connecticut’s Department of Consumer Protection Gaming Division issued a cease-and-desist order to Robinhood Derivatives and other operators over sports event contracts it characterized as unlicensed online gambling, highlighting the risk of state-level regulatory challenges. Adverse outcomes in regulatory actions or changes in law could prevent it from offering, or continuing to offer, event contracts.
The company has also faced investigations and reviews tied to crypto promotions and tokenized equity products, and it paid more than $80 million in fines across 2023 to 2025 for a range of compliance issues. As prediction markets and related derivatives scale, regulatory limits could cap product rollout and add expense volatility.
Reliance on Volatile Revenue Streams: A large portion of HOOD’s business is tied to transaction-driven activity, including options trading, equities turnover and crypto trading. These categories are highly sensitive to market cycles, investor sentiment and shifts in risk appetite. During periods of volatility or bullish momentum, revenues can surge, but they can fall just as quickly when markets cool, trading volumes fall or retail engagement declines (as it occurred in the first quarter of 2026).
This creates an inherently uneven earnings profile, making Robinhood’s results less predictable and more exposed to macro and sentiment-driven swings than traditional, fee-based financial firms.
Is Robinhood Stock Still Worth Buying?
Analysts are bearish on Robinhood’s prospects. Over the past 30 days, the Zacks Consensus Estimate for 2026 and 2027 has been revised lower to $1.83 and $2.45, respectively.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HOOD’s 2026 earnings implies a 10.7% year-over-year decline. The trend will likely reverse next year, with earnings numbers suggesting a 34% jump. The consensus mark for 2026 and 2027 revenues calls for a year-over-year increase of 11% and 22.5%, respectively.
Sales Estimates
Image Source: Zacks Investment Research
Despite the recent slide, Robinhood shares are trading at a premium to the industry. At present, the company has a price/tangible book (P/TB) of 8.55X for the trailing 12 months compared with the industry average of 3.08X.
Robinhood’s P/TB TTM
Image Source: Zacks Investment Research
HOOD stock is expensive compared with Schwab and Interactive Brokers. Schwab and Interactive Brokers have a trailing 12-month P/TB of 6.57X and 1.75X, respectively.
Despite the recent pullback, Robinhood stock does not appear to offer an attractive entry point. The key concern remains weakness in the cryptocurrency market, which continues to weigh heavily on investor sentiment. Although the company is making efforts to diversify into banking, cards, event contracts, wealth management and international markets, the stock is still largely viewed through the lens of digital-asset activity.
Robinhood’s transaction-driven revenue model leaves it highly exposed to market cycles and shifts in retail trading appetite. Ongoing regulatory scrutiny and past penalties further add to the risk profile. While the company maintains a strong balance sheet and has several growth initiatives underway, investment spending, execution complexity and recent downward revisions to earnings estimates are concerns. Given its premium valuation relative to the industry and peers, investors may be better off selling HOOD stock.
At present, HOOD carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
HOOD Stock Retreats After 2025 Rally: Should You Stay Invested?
Key Takeaways
After a record-breaking rally in 2025, shares of Robinhood Markets (HOOD - Free Report) have pulled back sharply in 2026, falling 25% year to date. The decline appears to reflect profit-taking after last year’s steep run-up, concerns over the stock’s elevated valuation and weaker crypto-related activity.
Following the slowdown in crypto trading volumes in the first quarter of 2026, which weighed on results and led to a weaker-than-expected performance, the softness has persisted in the ongoing quarter. This continued weakness has pressured investor sentiment, even as Robinhood maintains solid momentum in equities, options, prediction markets and net deposits.
In comparison, shares of HOOD’s close peers, Charles Schwab (SCHW - Free Report) and Interactive Brokers (IBKR - Free Report) , have fared better. Even the industry to which the stock belongs has declined just 3.4% so far this year.
YTD Price Performance
Image Source: Zacks Investment Research
After such a weak performance, the key question is whether investors should pay attention to the prevailing bearish sentiment or look past the near-term concerns and use the current dip as a buying opportunity. To answer that, it is important to assess Robinhood’s fundamentals, growth drivers and market-related catalysts before making an investment decision.
Robinhood: Major Factors to Consider
Product Innovation & Global Presence: Robinhood is boosting its growth through aggressive product innovation and global expansion, positioning itself as a next-generation fintech ecosystem. Earlier this week, the company announced the rollout of AI agents for trading and credit card purchases. The move highlights the company’s broader strategy of bringing institutional-style automation tools to everyday consumers.
Further, this year, it has unveiled the beta version of its in-app community feature, Robinhood Social, and a new Robinhood Platinum Card. The company has also received in-principle approval to set up the brokerage business in Singapore, bringing it closer to entering one of Asia’s key financial hubs.
Major 2025 launches include Robinhood Cortex, an AI assistant that allows users to build custom indicators, analyze markets and access real-time AI-driven news insights. The Legend platform enhances advanced trading with futures access, short selling, simulated options returns and nearly 24/5 index options trading.
Banking services and a Gold credit card extend Robinhood’s reach into personal finance, aiming to become a digital banking alternative. AI integration and rapid product rollouts are driving engagement and monetization through premium tiers. Social and community features aim to boost retention and virality, while expanded trading tools attract both retail and institutional users.
Robinhood is expanding globally by combining traditional finance with digital assets. Its initiatives include tokenized U.S. stocks and ETFs in Europe, broader crypto services, a proprietary blockchain, future banking products, and expansion into Canada and Asia-Pacific through new offices and planned acquisitions.
Business Diversification Efforts: Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to expand its market reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income, which came down to 59% in 2025.
Robinhood is betting big on the lucrative prediction markets and, in a partnership with Susquehanna International Group, acquiring a 90% stake in MIAX Derivatives Exchange (a CFTC-licensed derivatives exchange). Through this, the company intends to launch a dedicated futures and derivatives exchange and clearinghouse by 2026. In the first quarter of 2026, events contract revenues were the primary driver that supported HOOD’s transaction-based revenues.
Robinhood’s other initiatives underscore its ambition to evolve into a full-scale financial services platform. In 2025, the company acquired TradePMR, an asset under administration custodian and portfolio management platform for Registered Investment Advisors, strengthening credibility in wealth management and positioning it to compete directly with incumbents like Schwab.
Likewise, Interactive Brokers and Schwab have been expanding their product suites aggressively. IBKR has added daily options on European indices and broadened crypto trading capabilities, including stablecoin funding and staking. Interactive Brokers also launched "Connections," a proprietary feature integrating global markets to provide clients access to stocks, options, futures, currencies and bonds across more than 160 markets worldwide.
Schwab acquired Forge Global Holdings, Inc. This aligns with the company’s strategy to offer private market capabilities to retail and advisor clients. It is rolling out spot crypto trading and has launched the Teen Investor account to reach younger clients and support longer-duration relationships.
Strong Balance Sheet: Robinhood is on solid ground, with significant cash reserves. As of March 31, 2026, it reported cash and cash equivalents of $5 billion.
In March, HOOD announced a fresh $1.5 billion share repurchase authorization (to be completed over the next three years). The company had initially launched a $1 billion share repurchase program in May 2024, which was later expanded by another $500 million in April 2025. The new buyback program underscores management’s confidence in the company’s financial position and long-term growth prospects.
Focus on Crypto: Robinhood’s crypto push, through tokenization, platform upgrades and EU expansion, is expected to support revenue growth and improve cost efficiency over time. The company is pursuing MiCA licenses to offer crypto services across the European Economic Area, while its Bitstamp acquisition and pending WonderFi deal further strengthen its digital assets strategy.
Bitstamp’s core spot exchange, offering more than 85 tradable assets, has significantly strengthened Robinhood’s crypto product suite. WonderFi brings two of Canada’s leading regulated crypto platforms, Bitbuy and Coinsquare, which will enable Robinhood to provide trading, staking and custody services in the country.
As HOOD expands its crypto offerings, revenues could benefit from stronger investor interest in digital assets. A broader platform may also create cross-selling opportunities across subscriptions, cash management and other services. Over time, favorable regulatory developments and product enhancements, including token support, wallet features, staking or earn programs where permitted and wider international availability, could boost transaction-based revenues and user engagement. However, recent crypto sell-offs and volatility may continue to weigh on trading activity and remain a near-term drag on the top line.
Litigation & Probes: Robinhood operates in a heavily regulated market and continues to expand into products that can draw scrutiny. In December 2025, Connecticut’s Department of Consumer Protection Gaming Division issued a cease-and-desist order to Robinhood Derivatives and other operators over sports event contracts it characterized as unlicensed online gambling, highlighting the risk of state-level regulatory challenges. Adverse outcomes in regulatory actions or changes in law could prevent it from offering, or continuing to offer, event contracts.
The company has also faced investigations and reviews tied to crypto promotions and tokenized equity products, and it paid more than $80 million in fines across 2023 to 2025 for a range of compliance issues. As prediction markets and related derivatives scale, regulatory limits could cap product rollout and add expense volatility.
Reliance on Volatile Revenue Streams: A large portion of HOOD’s business is tied to transaction-driven activity, including options trading, equities turnover and crypto trading. These categories are highly sensitive to market cycles, investor sentiment and shifts in risk appetite. During periods of volatility or bullish momentum, revenues can surge, but they can fall just as quickly when markets cool, trading volumes fall or retail engagement declines (as it occurred in the first quarter of 2026).
This creates an inherently uneven earnings profile, making Robinhood’s results less predictable and more exposed to macro and sentiment-driven swings than traditional, fee-based financial firms.
Is Robinhood Stock Still Worth Buying?
Analysts are bearish on Robinhood’s prospects. Over the past 30 days, the Zacks Consensus Estimate for 2026 and 2027 has been revised lower to $1.83 and $2.45, respectively.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HOOD’s 2026 earnings implies a 10.7% year-over-year decline. The trend will likely reverse next year, with earnings numbers suggesting a 34% jump. The consensus mark for 2026 and 2027 revenues calls for a year-over-year increase of 11% and 22.5%, respectively.
Sales Estimates
Image Source: Zacks Investment Research
Despite the recent slide, Robinhood shares are trading at a premium to the industry. At present, the company has a price/tangible book (P/TB) of 8.55X for the trailing 12 months compared with the industry average of 3.08X.
Robinhood’s P/TB TTM
Image Source: Zacks Investment Research
HOOD stock is expensive compared with Schwab and Interactive Brokers. Schwab and Interactive Brokers have a trailing 12-month P/TB of 6.57X and 1.75X, respectively.
Despite the recent pullback, Robinhood stock does not appear to offer an attractive entry point. The key concern remains weakness in the cryptocurrency market, which continues to weigh heavily on investor sentiment. Although the company is making efforts to diversify into banking, cards, event contracts, wealth management and international markets, the stock is still largely viewed through the lens of digital-asset activity.
Robinhood’s transaction-driven revenue model leaves it highly exposed to market cycles and shifts in retail trading appetite. Ongoing regulatory scrutiny and past penalties further add to the risk profile. While the company maintains a strong balance sheet and has several growth initiatives underway, investment spending, execution complexity and recent downward revisions to earnings estimates are concerns. Given its premium valuation relative to the industry and peers, investors may be better off selling HOOD stock.
At present, HOOD carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.