Shares of Robinhood dropped 10% in early Wednesday trading after the company posted fourth-quarter revenue that fell short of analyst expectations, with a slowdown in cryptocurrency trading weighing heavily on performance.
The brokerage reported earnings per share of $0.66, topping the $0.63 consensus estimate. Revenue came in at $1.28 billion, missing forecasts of $1.33 billion.
Crypto was the biggest drag on the quarter. Revenue from digital asset trading declined 38% year over year to $221 million, pulling transaction-based revenue down to $776 million, below Wall Street estimates. The weakness followed a late-year slide in crypto markets that dampened customer activity.
Net interest revenue totaled $411 million, also missing expectations, as lower securities lending balances and softer yields pressured results.
In response, analysts revised their outlooks. JPMorgan lowered its price target on Robinhood to $113 from $130 and maintained a Neutral rating. The bank cautioned that more difficult year-over-year comparisons in 2025 could make it harder to sustain growth into 2026. Even so, the updated target implies more than 50% upside from the recent share price near $76.50.
JPMorgan analysts, led by Kenneth Worthington, said January trading volumes improved compared with a year ago but noted signs of moderating growth across key operating metrics. The firm reduced its revenue projections accordingly.
Compass Point offered a more optimistic take despite trimming its price target to $127 from $170 and reiterating a Buy rating. Analyst Ed Engel pointed to solid January key performance indicators across all segments, including crypto volumes that were stronger than feared after the weak fourth quarter.
However, Engel acknowledged a 9% EBITDA miss, driven by weaker securities lending revenue and declining take rates in both crypto and options trading. He highlighted management’s guidance for 18% operating expense growth in 2026, which he expects will support investment in crypto products, decentralized finance initiatives, and prediction markets.
While those investments could generate benefits in the second half of 2026, Engel said investors may temper near-term EBITDA expectations. He also identified potential longer-term catalysts, including the internalization of prediction markets and possible blockbuster IPOs from companies such as SpaceX, Anthropic, and OpenAI.
Engel added that Robinhood’s crypto take rate fell three basis points sequentially in the fourth quarter and has declined a further five basis points so far in 2026, as higher-volume traders account for a growing share of activity on the platform.
