Robinhood stock fell 10% after earnings, while Bernstein and StoneX maintained their positive ratings, pointing to the company’s new business lines and details in its profitability calculation.
According to analyst assessments reported by The Block, Bernstein maintained its Outperform rating on Robinhood and its $160 price target. StoneX likewise kept its $170 price target and “Buy” rating unchanged.
In its third-quarter results, announced Tuesday, the company reported revenue of $1.42 billion; crypto revenue fell 55% year over year to $120 million. HOOD shares fell 10% in after-hours trading following results that came in slightly below expectations. Analysts, however, see a different growth picture beyond that reaction.
StoneX: Unrealized loss weighed on earnings
StoneX analyst Mark Palmer called the stock’s decline an overreaction. According to Palmer, an unrealized loss on Robinhood Ventures Fund I reduced earnings per share by $0.07.
The analyst calculated that, excluding this loss and certain other items, earnings per share were $0.60 above market expectations. Separating out these items that affected reported earnings therefore plays an important role in Palmer’s positive assessment.
Bernstein’s outlook: New businesses to account for a quarter of revenue in 2028
Bernstein analysts led by Gautam Chhugani believe Robinhood’s crypto operations are expanding from a retail trading-based model toward infrastructure services. They expect prediction markets, perpetual futures, and Robinhood Chain to account for approximately 25% of total revenue in 2028.
Robinhood Chain, which launched in July, generated $26 million in net revenue in its first quarter on mainnet. We previously covered the new network’s contribution to the company’s financial results; Bernstein views this contribution in terms of the company’s future revenue mix.
Crypto revenue excluding Chain fell 6% from the previous quarter to $94 million. Bernstein largely attributes the decline in revenue per transaction in crypto operations to the growth of Robinhood Earn, a stablecoin product with more than $500 million in assets. Excluding this product, which generates less revenue than traditional crypto transactions, revenue per trading volume remained close to the previous quarter’s level.
Prediction markets also generated $173 million in revenue during the quarter. According to Bernstein, the share of non-sports contracts doubled to approximately 30%, led by growth in crypto, commodities, and financial contracts.
Not investment advice.