StoneX reiterates Buy on Robinhood stock, cites record metrics

Robinhood posted record quarterly revenue of $1.42 billion and adjusted EPS of $0.60, above the cited $0.55 consensus, but revenue and reported EPS of $0.51 slightly missed estimates of $1.43 billion and $0.56. Crypto revenue fell 55% to $120 million, monthly active users were about 13 million versus 14.4 million expected, and shares dropped approximately 7% in extended trading. StoneX reiterated Buy with a $170 target, while Mizuho maintained Outperform at $130; record net deposits, Gold subscribers, options and event-contract volumes provided offsets.

Analysis

The key issue is not the quarter’s accounting miss but whether engagement and monetization are rolling over together. Weak active-user and crypto trends, alongside reports of softer recent event-contract activity, are leading indicators for transaction-sensitive revenue; if they persist, record deposits and subscriptions may not offset the loss quickly. Conversely, broader strength in options, Gold, and deposits would indicate HOOD is becoming less dependent on crypto-cycle activity. That diversification is the credible bull case, but it needs to show up in sustained revenue per user and expense discipline—not just activity records.

Near term (days), the after-hours decline can overshoot on positioning, while the adjusted-EPS debate may distract from forward activity. Over 1–3 months, watch monthly users, crypto revenue, options/event-contract volumes, and operating-expense growth. Over 6–18 months, the question is whether recurring balances and subscriptions support earnings through a weaker trading environment. The bullish analyst target is a long-dated earnings-multiple thesis, not evidence that next-quarter momentum has stabilized; the wide target dispersion reinforces execution risk.

Contrarian balance: the non-operating fund mark is a poor reason by itself to sell, but dismissing the whole earnings shortfall as accounting noise is also too generous. A high valuation leaves limited room for activity deceleration. The thesis is falsified by renewed user growth and resilient transaction revenue with expenses contained; a further deterioration in those metrics would strengthen the downside case.

Key Decisions for Investors

• Do not chase either the initial gap-down or a reflexive rebound. Wait for the next activity update and guidance to establish whether September/October softness is temporary or continuing.
• For a relative-value expression, consider a beta-sized short in HOOD against a long in a diversified incumbent broker such as Charles Schwab, entered after post-earnings volatility settles. This targets HOOD-specific engagement and valuation risk; it is not a clean hedge for broad market or retail-trading shocks.
• If options are attractively priced after checking implied volatility, use a defined-risk HOOD put spread rather than an unhedged short. Avoid the trade if the premium already prices a sharp near-term decline.
• Reassess or exit the bearish position if monthly active users recover, crypto revenue stabilizes, and options/event-contract activity holds up while operating-expense growth moderates. Escalate downside risk if the next report confirms weaker activity and expense growth remains elevated.