Shares of Robinhood Markets (HOOD +2.70%) have fallen 11.8% this week, according to data from S&P Global Market Intelligence. The digital brokerage keeps growing its user base and deposits, but saw a huge decrease in cryptocurrency revenue, which has Wall Street spooked.
Here’s why Robinhood stock was falling this week, and whether investors should consider buying the dip today.
Today’s Change
(2.70%) $1.97
Current Price
$74.86
Key Data Points
Market Cap
$66B
Day’s Range
$73.08 – $75.28
52wk Range
$45.56 – $153.86
Volume
822K
Avg Vol
34M
Gross Margin
94.92%
Growing prediction markets, declining crypto revenues
Robinhood released its Q1 2026 earnings on April 28th. Revenue was up 15% year-over-year to $1.07 billion, while net income only grew 3% to $346 million.
Positives from the quarter include 22% growth in net deposits to $18 billion, and Robinhood Gold subscribers growing 36% to 4.3 million. The company is showing a strong ability to increase monetization among its heavy users as they begin banking and allocate more of their personal finances to Robinhood products. It also looks like the launch of Prediction Markets on Robinhood has gone well, with the segment growing 320% year-over-year to $147 million in the period.
So why is the stock down? For one, the net income growth was weak compared to its topline figures. Two, Robinhood’s cryptocurrency revenue declined 47% year over year to $143 million in the quarter. This was once a cash cow for the business, but now there are fears that the hype around cryptocurrency trading is fading.
Image source: Getty Images.
Time to buy Robinhood stock?
There is a lot to like about Robinhood’s business. It keeps growing its user base and increasing its monetization avenues from existing users. Total revenue is up 177% in the last five years.
However, Robinhood still does not trade at a cheap price, with a price-to-earnings ratio (P/E) of 36 even after experiencing a 50% drawdown in its share price. If market volatility persists, there is a risk Robinhood stock will fall significantly from here. Understand this before buying the dip.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
