Robinhood Stock Falls After Analysts Cite Weak Crypto Volumes And Market Headwinds In Q2 Outlook

Wall Street analysts rerated Robinhood Markets, Inc HOOD on Thursday after it reported its first-quarter results on Wednesday.

Robinhood reported quarterly EPS of $0.37, which beat the analyst consensus estimate of $0.32. Quarterly revenue of $927 million beat the analyst consensus estimate of $922.53 million and is up from $618 million Y/Y.

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JP Morgan analyst Kenneth Worthington maintained a Neutral rating for Robinhood Markets and raised the price target from $44 to $47.

Needham analyst John Todaro reiterated a Buy rating for Robinhood Markets and lowered the price target from $62 to $58.

Piper Sandler analyst Patrick Moley maintained a rating of Overweight for Robinhood Markets and a price target of $70.

Goldman Sachs analyst James Yaro reiterated a Buy rating for Robinhood Markets and raised the price target from $52 to $56.

JP Morgan:  Net revenue exceeded expectations at $927 million as the transaction-based revenue beat outpaced net interest revenue miss. Expenses came in heavier than previously modeled before adjusting for incremental TradePMR costs. As such, the earnings beat was of low quality, as a lower-than-modeled effective tax rate primarily drove it. New businesses and products defined much of the conversation in the first quarter of 2025.

Despite the poor performance, Robinhood still attracted a record $18 billion in net new deposits this quarter, of which only ~15% was due to promotions. Strong organic growth continues to surprise in terms of its duration and magnitude and remains a highlight of the result and an indication of the company’s strategic successes. However, the market environment has changed. While it asserted that the retail investor remains healthy and strong platform engagement has been broad-based, some preliminary second-quarter data has been weaker since the onset of the global tariff war. Worthington also observed a decline in margin balances and potential client movement of assets into cash, noting the potential for a slowdown in trading activity as a sign of customer weakness.

Worthington projected second-quarter adjusted EPS of $0.31.

Needham: Robinhood reported a modest top-line beat but a narrow miss on adjusted EBITDA. Crypto volumes softened in the first quarter of 2025 while options and equities remained robust. Prediction market volumes align with Todaro’s projections and noted futures. Gold cards, in particular, were positive callouts, with card users increasing from 200,000 to 100,000. Todaro expected growth in equities and options in the second quarter of 2025, while he modeled a roughly 48% decline in crypto, in line with industry trends. Todaro lowered interest income, as we expect lower rates, which is partially offset by higher transactional activity in this environment.

Todaro projected second-quarter revenue of $814.0 million and EPS of $0.24.

Piper Sandler:  Robinhood stock initially gained traction on better-than-industry margin trends month to date, strong adoption and indications of interest in new assets and personal finance tools, as well as incremental information on the product roadmap through the rest of 2025 and beyond.

On the call, management indicated that annual run-rate revenues for its futures, index options, and prediction market offerings were each individually already tracking around $20 million. In futures, Robinhood disclosed that customers traded 4.5 million contracts in April, exceeding the total amount traded in the first quarter of 2025. In prediction markets, Robinhood has seen >1 billion contracts traded in the last six months across contracts related to the US elections, economic indicators, NCAA Basketball, the Masters and the NBA/NHL playoffs.

CEO Vlad Tenev said Robinhood loves what it’s seeing from its prediction market customers and plans to expand the offering into a wider variety of contracts over time.

Moley projected second-quarter revenue of $852.6 million and EPS of $0.29.

Goldman Sachs: Yaro expects a muted market response, driven by a 1% total revenue beat, led by healthy transaction revenue (6% above consensus), partially offset by 4% weaker net interest income and 11% lower other revenue. Aside from crypto, customer activity remained healthy in April, possibly better than expected by certain investors. Against this, crypto volumes were down an estimated ~27% M/M, which resulted in lower total transaction revenue. The company reiterated a continued focus on rolling out new products across several areas, including prediction markets, digital wealth, digital banking and crypto.

Price Action: HOOD stock is trading 3.74% lower at $47.28 as of last check on Thursday.

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