CryptoCurrency
Robinhood Markets (HOOD) Stock: Is It Still a Buy After an Epic Rally?
TLDR
- Robinhood shares have soared 1,100% over three years, with Q3 2024 revenue doubling to $1.2 billion
- The stock trades at 49x earnings while platform assets jumped 119% to $333 billion
- Cryptocurrency trading revenue climbed 98% to $160 million as the company expands beyond traditional trading
- Funded accounts grew 10% to reach 26.8 million users with earnings per share rising 259% to $0.61
- Revenue projections suggest growth from $4.5 billion in 2025 to potentially $8.2 billion by 2027
Robinhood Markets has become one of the hottest stocks in the trading platform space. Shares have climbed 1,100% over the past three years, moving from $34 in April 2025 to approximately $120 today.
The financials back up the stock performance. Third quarter 2024 revenue hit $1.2 billion, double the prior year. Earnings per share reached $0.61, up 259% year-over-year.
User metrics show continued momentum. The platform now serves 26.8 million funded accounts, a 10% increase. Total platform assets surged 119% to $333 billion.
The company’s revenue trajectory has been remarkable. Starting at $280 million in 2019, revenue reached approximately $2.9 billion in 2024. Over the past 12 months, revenue jumped 75% from $2.4 billion to $4.2 billion.
Analysts expect 53% revenue growth for 2025, pushing total revenue to around $4.5 billion. Some projections show revenue potentially reaching $8.2 billion by 2027, representing an 82% increase from 2025 estimates.
Cryptocurrency and Diversification
Cryptocurrency has emerged as a key growth driver. Crypto trading revenue increased 98% year-over-year to $160 million in the most recent quarter. The acquisition of Bitstamp expanded the company’s global regulatory footprint.
The platform is moving beyond simple stock trading. Prediction markets have gained serious traction, with billions of contracts traded and over $100 million in annual revenue. This demonstrates the company’s ability to quickly capitalize on emerging opportunities.
Robinhood benefits from its young user base. The company is positioned to capture part of the massive wealth transfer expected over the next two decades as trillions move from baby boomers to younger generations.
Profitability and Margins
Profit margins tell an encouraging story. Adjusted net margins improved from negative in 2021 to about 35% in 2024. The business model offers operational leverage since technology infrastructure, compliance, and support costs don’t scale proportionally with revenue.
Analysts believe margins could expand to 40%. Combined with projected revenue of $8.2 billion, that would generate earnings around $3.3 billion. That’s roughly triple the 2024 figures.
Some market watchers see a path to $230 per share. This scenario requires earnings to triple while the P/E ratio stabilizes around 35x instead of contracting to 18x.
Valuation Considerations
The stock currently trades at a P/E ratio of 49, above the tech sector average of 44. At roughly 57x estimated 2025 earnings, the shares aren’t cheap.
High valuations create elevated expectations. A few quarters of missed estimates could trigger profit-taking. The rapid appreciation from $34 to $120 in nine months means many shareholders are sitting on substantial gains.
Robinhood went public in 2021 and hasn’t faced a bear market as a public company. Bull markets typically last seven years, so the current rally starting in late 2022 could have more room to run. However, when downturns arrive, trading activity usually slows, directly impacting the company’s revenue.
The company’s wealth management initiatives target its young demographic as their financial needs grow more complex. Platform assets of $333 billion and 26.8 million funded accounts provide a strong foundation, while crypto revenue of $160 million shows diversification beyond traditional trading.
