Experts weigh in as Robinhood experiences a 10% decline, attributed to a decrease in cryptocurrency trading affecting performance.

JPMorgan and Compass Point were among the sell-side teams reducing price targets on HOOD.

Robinhood declines following earnings report (CoinDesk)

What to know:

• Robinhood’s stock fell 10% after its fourth-quarter revenue of $1.28 billion fell short of projections.
• Crypto revenue decreased 38% year-on-year to $221 million, adversely affecting transaction revenue and leading to misses in adjusted EBITDA and net interest income.
• JPMorgan reduced its price target to $113 from $130, citing slowing growth and challenging comparisons for 2025.

Robinhood (HOOD) shares saw a 10% decline in early trading on Wednesday following a revenue miss for the fourth quarter, with a downturn in crypto trading affecting the results.

The widely-used trading application announced fourth-quarter earnings per share of $0.66, surpassing the anticipated $0.63. However, its revenue was $1.28 billion, which was less than the $1.33 billion predicted by analysts.

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A decline in crypto trading significantly impacted the results, as crypto revenue fell 38% year-over-year to $221 million.

The Wall Street bank JPMorgan lowered its price target on Robinhood to $113 from $130 after the disappointing fourth quarter, while keeping a neutral rating and cautioning that tougher comparisons for 2025 will raise expectations for 2026.

This new price target still indicates potential growth of over 50% from the current price of $76.50.

Transaction revenue reached $776 million, which was below expectations, driven by a decrease in crypto revenue to $221 million amid a late-year downturn in digital asset markets. Net interest revenue of $411 million also fell short of the bank’s estimates, impacted by lower securities lending and reduced yields.

Although January volumes have improved year over year, the bank’s analysts, led by Kenneth Worthington, noted that growth is slowing across key metrics, leading to a reduction in top-line forecasts and a lower price target.

Compass Point’s Ed Engel offered a more optimistic perspective, albeit also decreasing his price target to $127 from $170 while reiterating a Buy rating. He observed that Robinhood’s January KPIs demonstrated solid momentum across all segments — including better-than-expected crypto volumes — despite the weak fourth quarter. However, a 9% EBITDA miss, resulting from lower securities lending and declining take rates in crypto and options trading, impacted the results.

The most unexpected detail, Engel remarked, was Robinhood’s 2026 operating expense guidance of 18% growth. He anticipates that spending will support product expansion in areas such as crypto, DeFi, and prediction markets, which could yield benefits in the latter half of 2026. Until that time, however, investors may reduce EBITDA expectations.

He mentioned the internalization of prediction markets, a potential user increase related to Trump, and the possibility of significant IPOs from SpaceX, Anthropic, or OpenAI as long-term advantages.

He also noted that Robinhood’s crypto take rate dropped by 3 basis points quarter-over-quarter in the fourth quarter and has decreased by an additional 5 basis points so far in 2026 as higher-volume traders constitute a larger portion of the mix.

Engel stated: “In the near-term, we could see investors penalize HOOD for the higher spending, but sentiment could rebound by mid-2026 as investment ROIs begin to materialize.”

Read more: Robinhood misses Q4 revenue estimates as fourth-quarter results dinged by crypto slump