Yimin X
Founder of YX Insights, Ex-FX/Rates Market Maker
Robinhood risks falling further unless crypto rallies hard this summer, because crypto winter has sharply slowed its business. Crypto transaction revenue fell by half, and prediction markets, while making waves, can be just as cyclical and event-driven. The latest drawdown unfolded in a clear five-wave pattern, so the bearish trend dominates. A short corrective bounce is possible, but after reaching its 200-day moving average the stock could drop further. x.comÂ
Robinhood's earnings miss leaves its revenue vulnerable to a market correction. Revenue could shrink further if the market corrects; a better entry may emerge over the next six months, but that is not assured. x.comÂ
Robinhood's growth looks more reliant on wallet share and the market backdrop because customer and active-user growth are weak. Revenue rose 12%, accounts 7% year over year, and net new funded accounts slowed one quarter after acquisition was re-prioritized; adjusted EPS growth unexpectedly turned negative. New customers grew at a mid-single-digit rate and monthly active users fell. MAU is volatile, but needs to improve next quarter. x.com x.com x.com x.comÂ
Robinhood's prediction-market growth can support revenue regardless of crypto sentiment because event contracts, including sports betting, are less boom-and-bust than crypto. Its Q3 event-contract revenue reached $173 million, or 12.2% of total revenue, versus $120 million from crypto trading. x.comÂ
Robinhood posted an ugly double miss, and adding prediction markets and betting to the platform may eventually destroy its core user base. x.comÂ
Robinhood's thesis has changed as retail trading volume trends down alongside Bitcoin weakness. Volume fell for two straight months, a US strategic bitcoin reserve now looks off the table as central banks chose gold, and agentic AI tools like Claude could soon deliver great trading experiences. Retail churn from gambling-style trading will further reduce activity, and replacing it is far harder than retaining high-net-worth accounts. x.com x.comÂ
Robinhood's record revenue and growing prediction-markets business support a near-term recovery in its stock after earnings. Q3 revenue reached $1.42B, crypto revenue of $120M beat the $114.1M estimate, and prediction-markets revenue rose sixfold year over year, though GAAP EPS missed at $0.51 versus $0.55. CEO Vlad Tenev said Robinhood plans to ramp support for Chain builders, bolstering the case for more ecosystem growth. x.com x.comÂ
Robinhood is a cyclical stock with no moat and no fair value or fair multiple, just a gamified trading platform whose shares move with market momentum. The only game with such names is to be in when momentum starts and out when it ends. For returns, it is better to wait out the cycle patiently before buying than to sit through the noise and pain. x.com x.comÂ
Robinhood's growth is almost entirely gambling: excluding prediction-market revenue, its top line was basically flat year over year, yet the stock trades at more than 50x earnings. x.com x.comÂ
Robinhood's growing prediction markets, options and Gold subscriptions make the $90s one of the most exciting times to buy. Q3 event-contract revenue reached $173 million, up over sixfold, options rose 31% to $399 million, and Gold subscribers reached a record 5.2 million. Crypto revenue fell 55% year over year to $120 million, and Dr. Crossroads reported misses on revenue and EPS; Robinhood remains a great buy as its international reach and banking services expand. x.com x.com x.comÂ
Robinhood looks like a tough hold because it is the poster child for retail speculation, and overcrowded AI stocks have already been hit. Per Bloomberg, retail traders' best picks are on track for their worst month since 2022. x.comÂ