If Wednesday’s after-hours reaction is any indicator, Robinhood Markets (HOOD) bulls are a little disappointed. Heading into the first-quarter earnings report, options markets implied a move of much more than the 1.57% notched by the fintech stock.
Not to be lost in the dejection of the stock’s docile response to the earnings report is the fact that Robinhood’s revenue of $927 million and earnings per share (EPS) of 37 cents beat Wall Street estimates as total platform assets surged 70% year-over-year to $221 billion. That marks the eighth time in the last nine quarters that Robinhood beat analysts’ EPS forecasts. With market volatility elevated, I maintain a bullish position on HOOD stock.
So, despite the muted response late Wednesday, it’s fair to say Robinhood delivered a solid quarter. Data confirm the brokerage firm wasn’t adversely affected by tariff-induced volatility in Q1. In fact, it’s benefiting from elevated market turbulence, and that theme is extending into the current quarter.
“Trading volumes and net deposits were incredibly strong for the quarter and in April,” said CFO Jason Warnick on a conference call with analysts.
New Kid on the Block
Arguably, Robinhood is the new kid on the block in brokerage. Weilding a cavalier name that underpins its market angle of appealing to investors with ultra-low fees and leveling the playing field between retail and professional investors. The company is a financial technology (fintech) name, up 105% over the past six months, with a market capitalization of $43.33 billion. It is three months away from celebrating its fourth anniversary as a public company.
Indeed, Robinhood isn’t a value stock in the strictest sense of the term, but management does see value in the shares as highlighted by buyback activity and expansion of that effort. The company said Wednesday that it’s adding $500 million to a previously announced repurchase program, elevating that total to $1.5 billion.
Robinhood is following through on its pledge to reduce its shares outstanding, and equally important to following through on buyback pledges is the point that the company is getting good value when it executes buybacks.
“You’ll recall we began executing on our $1 billion share repurchase plan in Q3 last year, with target completion over two to three years. Since then, we’ve moved faster and have deployed over $650 million at an average price of $33 per share,” said Warnick on Robinhood’s earnings call. “This includes over $300 million of buybacks in Q1, which more than offset share issuance for TradePMR.”
When it comes to funding shareholder rewards, it helps to have a strong balance sheet, which Robinhood does, potentially indicating it’s not a candidate to take on debt in the name of buying back stock.
Resilient Crypto Returns for Robinhood
Robinhood is often considered a crypto-correlated stock, or at least, crypto-adjacent. So with bitcoin’s price action surprisingly flat since the start of the year, it’d be reasonable to assume that side of the business was a drag on the trading platform’s first-quarter results.
That wasn’t the case. Robinhood posted $260 million in cryptocurrency revenue in the first three months of 2025, representing the second-best stretch in recent memory. For those that insist on viewing Robinhood as crypto-correlated and viewing that as a negative, altered thinking might be in order because bitcoin prices are perking up this month, and the long-term outlook remains bullish.
“We’re diversifying the business outside of the crypto business, which will make us less reliant on crypto transaction volumes. But also within crypto, there’s going to be diversification over time,” said CEO Vlad Tenev on the conference call. “So crypto itself will diversify and be less reliant on transaction volumes in the future.”
Robinhood Gold Keeps Glittering
Fintech or not, Robinhood is, at its core, a financial services company, meaning the more assets that come in the door, the better. Robinhood Gold is proving to be a vital part of the company’s broader flywheel. Clearly, the 3% IRA Match is one reason why Robinhood Gold subscribers surged by 1.5 million, or 90%, to 3.2 million in the first quarter.
Gold isn’t free. It costs $5 a month, and while that doesn’t sound like much (it’s not), it adds up, as highlighted by a 39% year-over-year increase in average revenue per user to $145. The offering is also a catalyst for monthly average user, a metric with the runway to return to 2021 highs.
Is Robinhood Markets a Buy, Sell, or Hold?
On Wall Street, HOOD stock carries a Moderate Buy consensus rating based on 13 Buy, six Hold, and zero Sell ratings over the past three months. HOOD’s average price target of $61.82 implies almost 26% upside potential over the next twelve months.
Working With the Rich to Empower the Poor
Robinhood is a trailblazing stock that has earned its place at the financial top table. Offering professional investment access to the retail crowd, especially during intense market volatility, has bolstered the company’s coffers and valuation. The stock is up almost 400% since 2022.
Supported by earnings and top-line growth, a fortress of a balance sheet, share repurchases, and a rapidly diversifying revenue stream, Robinhood has all the hallmarks of a bullish stock, and Wall Street concurs. Further adding to the bull case is the Robinhood Gold credit card — an invitation-only product that added 200,000 members in recent weeks. That’s more brand awareness, loyalty, and fee revenue for the company.
Overall, I maintain a Buy rating on HOOD stock and expect further market volatility for the foreseeable future.