TLDR
- HOOD shares have tumbled 35% since the start of the year and shed 30% in just five days, as Bitcoin’s steep drop has weighed on crypto-exposed equities.
- Analysts anticipate Q4 EPS of $0.62-$0.63 on revenue up 30% YoY to $1.32-$1.35 billion, though this marks a decline from the prior year’s $1.01 per share.
- Projections show robust expansion in key areas: net interest income rising 46.1%, transaction revenue climbing 20.5%, and custodial assets surging to $355.93 billion.
- Even after the recent pullback, the Street retains a Strong Buy consensus with 14 Buy recommendations and price targets suggesting 100%+ upside.
- The February 10 report will be scrutinized for user growth trends, trading volumes, and management’s take on crypto rebound prospects and 2025 earnings power.
Robinhood Markets shares have hit a fresh year-to-date trough just ahead of its Q4 earnings release on February 10, making for a strikingly timed downturn.
The stock has declined 35% year-to-date, with a roughly 30% plunge over the past five sessions alone, as Bitcoin’s steep selloff has pummeled crypto-linked names broadly.
The Street is modeling Q4 EPS of $0.62-$0.63, down from $1.01 a year earlier, while revenue is seen growing 30% YoY to $1.32-$1.35 billion.
The consensus EPS forecast has been lifted 5% over the past month, reflecting growing analyst confidence in the quarter even as shares have struggled.
Breaking Down the Revenue Picture
Several revenue lines are under the microscope. Net interest income is projected at $432.57 million, a 46.1% YoY increase, while transaction revenue is expected to reach $809.88 million, up 20.5%.
The crypto narrative is more nuanced. Crypto transaction revenue is forecast to slide 19.8% to $287.06 million, aligning with recent Bitcoin weakness that sparked HOOD’s latest decline.
Options trading appears robust, with revenue seen jumping 42% to $315.34 million. Equity trading revenue is projected to rise 42.3% to $86.83 million.
Additional positives include securities lending revenue, which is expected to more than double to $55.77 million, and margin interest income, forecast to surge 100.5% to $182.45 million.
User Growth and Assets Under Management
Funded accounts are projected to hit 27.12 million, up from 25.20 million last year. While that’s expansion, investors will be watching whether the pace is picking up or decelerating.
Custodial assets are seen nearly doubling to $355.93 billion from $192.90 billion a year ago. This gauge of user balances on the platform is key for future top-line expansion.
The firm posted solid results through the first nine months of 2025, with trading volumes spiking across asset classes amid heightened volatility. That boost may have faded in Q4 as crypto headwinds emerged.
What Analysts Are Saying
Even after the harsh selloff, the Street stays constructive. HOOD holds a Strong Buy consensus based on 14 Buy and four Hold recommendations over the past quarter.
Bernstein’s Gautam Chhugani recently reaffirmed his Buy rating, citing 120% upside and an increasingly appealing valuation. He cautioned that near-term swings could present even more attractive buying opportunities.
Piper Sandler’s Patrick Moley also keeps his Buy rating, with 100%+ upside, calling a top way to capitalize on the secular expansion of retail trading.
The mean price target stands at $154.93, suggesting 113% upside from here – a wide chasm between current levels and where analysts believe fair value lies.
What to Watch on Earnings Day
The focus will be on whether user growth is stabilizing or gaining traction following recent turbulence. 2025 guidance will be pivotal, particularly on trading appetite and any crypto rebound.
Management’s remarks on new offerings and revenue mix will be important. Though crypto income may remain choppy, has been expanding subscriptions, net interest revenue, and other lines to foster steadier long-term expansion.
Shares have collapsed 31.1% over the past month versus a 0.5% rise for the S&P 500. That stark underperformance has opened up what some see as a more compelling risk/reward for fresh capital.
HOOD presently holds a Zacks Rank #3 (Hold). With Q4 results due February 10, the stock’s near-term trajectory will likely hinge on management’s outlook.
