Robinhood’s (HOOD) Crypto Revenue Collapsed. The Business Did Not

Robinhood Markets, Inc. (HOOD) just went through exactly the kind of crypto slowdown that once would have seriously damaged the business. Just a year ago, crypto accounted for nearly half of Robinhood’s revenue mix. In Q1 2026, however, revenue from that segment was cut roughly in half. Yet despite that collapse, the commission-free brokerage platform continued growing, suggesting Robinhood is becoming less dependent on crypto cycles than many investors still assume.

Much of that resilience has been driven by Robinhood’s emerging non-trading businesses, which are helping the company diversify beyond its traditional dependence on crypto trading. After a strong bull market between 2024 and 2025, largely fueled by enthusiasm for artificial intelligence (AI) and crypto, 2026 has brought a clear trend toward normalization, with investors becoming less willing to pay premium valuation multiples for the business.

That reset in sentiment has already materially compressed the stock’s valuation. Even so, I continue to see an attractive risk-reward profile and maintain my bullish view on HOOD stock.

Crypto Has Slowed, but the Business Keeps Growing

Robinhood’s share performance has been very disappointing this year, declining more than 30% so far and nearly 50% from its all-time highs in October of last year. That peak coincided with Bitcoin (BTC-USD) reaching its own all-time high of roughly $125,000.

Bitcoin is now trading around the $79,000 level after falling as low as $62,000 in February. BTC’s decline this year has a lot to do with Robinhood’s bearish momentum. After all, crypto trading has been a key driver of the company’s growth thesis. The chart below illustrates this relationship quite clearly.

In Q1 2025, crypto accounted for roughly 43% of Robinhood’s revenue mix, generating $252 million in revenue out of total transaction-based revenue of $583 million. A year later, Robinhood’s most recent earnings report showed crypto revenue of $134 million, while total transaction-based revenue actually increased to $623 million. As a result, crypto represented just 21.5% of the mix.

The Underlying Business Remains Resilient

The good news is that Robinhood’s Q1 2026 results were not nearly as concerning as they may seem at first glance. Even with crypto revenue cut nearly in half, the company still managed to grow on a consolidated basis. Total net revenue increased 15% year-over-year to $1.07 billion, while adjusted EBITDA margin remained exceptionally strong at 50%. Net income also held up well at $350 million, up 4% from the prior year.

A notable highlight was the rapid growth of Robinhood’s emerging non-trading businesses. The “Other” category — which includes Robinhood Gold subscriptions, banking, Bitstamp, and prediction markets — surged from $54 million in Q1 2025 to $85 million in Q1 2026.

A Major Valuation Reset Changes the Story

Yet the sharp sell-off in Robinhood stock immediately following Q1 showed that expectations had become too high. Investors were increasingly concerned about normalization after an exceptionally strong 2025.

In Q1 2025, Robinhood’s revenue grew 50% year-over-year. Subsequently, in Q4 2025, revenue was still growing at 26.5%. Consensus estimates now imply that revenue will grow by around 20% year-over-year in Q2 2026. That would represent a slight sequential acceleration, but it remains at a much more subdued pace than the 45% growth delivered in Q2 2025.

As a result, it no longer made sense to pay nearly 70x earnings, which is roughly where HOOD traded at its all-time highs. Currently, Robinhood stock trades at about 40.6x FY26 earnings. While that is still a premium valuation compared to the financial services sector median of 13.7x or the technology sector at about 27x, it is far less demanding than it was in October of last year.

In other words, HOOD has already undergone a meaningful valuation reset. At the same time, the underlying business continues to grow as the company diversifies beyond crypto. If Robinhood can sustain 20%-plus revenue growth while maintaining industry-leading profitability, with EBITDA margins remaining around 50%, the current setup arguably looks much more attractive than it did at peak sentiment.

Is HOOD a Buy, According to Wall Street Analysts?

The consensus among Wall Street analysts is a Strong Buy rating for HOOD. Of the 20 ratings issued over the past three months, 17 are Buy and three are Hold. That said, several analysts trimmed their price targets following the Q1 results. Even so, the average price target remains $103.30, implying a potential upside of 34.59% from the current share price.

A More Balanced Risk-Reward for HOOD

I see the recent correction in Robinhood stock as much more of a normalization of expectations than a sign that the growth thesis has fallen apart. It is true that the cryptocurrency segment has lost momentum compared to its 2025 peak. What matters most, however, is that the company continues to grow revenue at a double-digit pace, maintain extremely robust margins, and build new monetization avenues beyond trading, which should help reduce the cyclicality of the business.

At the same time, the valuation has already undergone a significant adjustment. HOOD no longer trades at the excessively optimistic multiples seen at the peak of crypto enthusiasm. This makes the risk-reward profile much more balanced, especially if the company can sustain 20%-plus revenue growth while keeping EBITDA margins near 50%.

In other words, the market appears to have significantly lowered expectations, but the underlying business continues to perform at a high level. For that reason, I believe Robinhood stock is more resilient than many investors realize, and I continue to rate the stock a Buy.