Robinhood Crushes Earnings—So Why Is Wall Street Hitting Sell?

Robinhood’s latest quarter was a blockbuster by any measure. The trading platform reported another round of triple-digit growth, with revenue surging 100% year over year to $1.27 billion and EPS of $0.61 beating expectations by eight cents. Transaction-based revenue jumped 129% to $730 million, powered by a 300%+ spike in crypto trading and a 50% gain in options activity. Interest income rose 66% to $456 million, and assets on the platform ballooned 119% to $333 billion. For a company once known solely for zero-commission stock trades, Robinhood is rapidly morphing into a multi-asset, global fintech ecosystem — one that now includes prediction markets, banking, tokenization, and international expansion through Bitstamp.

The quarter's strength came from everywhere. Crypto trading revenue more than tripled to $268 million, options generated $304 million, and equities revenue jumped 132% to $86 million. Net deposits hit a record $20.4 billion, up 29% annualized, while Robinhood Gold subscribers grew 77% to 3.9 million. Average revenue per user climbed 82% to $191, and adjusted EBITDA nearly tripled to $742 million. Even prediction markets — Robinhood’s new frontier product — crossed $100 million in annualized revenue, doubling volume every quarter to reach 2.3 billion contracts traded in Q3 and 2.5 billion in October alone. CEO Vlad Tenev called Q3 “a period of relentless product velocity,” emphasizing record equity and options volumes and record assets under custody.

Still, the market wasn’t impressed. Despite the stellar print, Robinhood shares dropped roughly 8% today — among the S&P 500’s worst performers. The move looks more like exhaustion than disappointment. The stock is up 250% year to date and has become one of 2025’s top momentum stories, but it also trades at about 60 times forward earnings and 27 times sales — stretched even by fintech standards. The combination of profit-taking across growth stocks and rich valuation multiples has triggered some cooling after months of unrelenting strength. Shares are currently fighting to hold the 50-day moving average near $129; should that fail, the October low around $120 marks the next line of support.

For traders, this setup is classic “strong story, tired chart.” The stock slipped down to test the 50-day MA ($129 for support. It has bounced back to the $131 area but the buy the dip crowd does appear to be a little tentative. Short-term momentum players are eyeing the $128 zone as a logical stop level so, if trying to play a bounce, have this level set as your stop.. A clean hold of support with a bounce back toward $140 could offer a tight risk-reward trade. Conversely, a decisive break below the 50-day could unleash a deeper consolidation toward $120 before dip buyers step back in.

Fundamentally, Robinhood’s growth story remains extraordinary. Total operating expenses rose 31% year over year to $639 million as the company ramped up marketing, product development, and international expansion, but even with that spending, operating leverage expanded sharply — margins improved, and EPS grew 259%. CFO Jason Warnick, who announced plans to retire next year, noted that “revenues doubled while margins expanded and earnings per share more than tripled from last year.” He also highlighted that prediction markets and Bitstamp each now generate over $100 million in annualized revenue.

Management painted a vision far beyond retail trading. Tenev outlined goals to have half of the company’s revenue come from outside the U.S. within a decade and for institutional clients to represent over half of the total business. He highlighted rapid progress in tokenization across the EU (400+ stock tokens now listed) and 60%+ quarter-over-quarter growth in Bitstamp volumes. The firm’s retirement assets climbed 144% year over year to $24 billion, while the Gold Card boasts 500,000 cardholders and $8 billion in annual spend. This is no longer the meme stock platform of 2021; it’s an integrated financial super-app catering to traders, investors, and now global crypto users.

Analysts echoed the optimism but urged caution on valuation. Mizuho raised its price target from $145 to $172, calling Q3 “no less impressive than the stellar year to date.” They flagged October trading data as “very strong,” with equity notional volumes already at $320 billion vs. $647 billion for all of Q3 and margin balances jumping to $16 billion from $11.8 billion average in the prior quarter. Still, a forward P/E of 60 and price-to-sales ratio above 27 set a high bar for sustaining momentum as interest rates stabilize and risk appetite fluctuates.

In the background, leadership transition adds a layer of headline risk. Warnick will step down in early 2026, with finance veteran Shiv Verma taking over. Verma stressed that the company’s “financial North Star remains the same — grow EPS and free cash flow per share and compound long-term shareholder value.” Analysts view the handoff as orderly, but after a year of aggressive growth and share repurchases ($810 million since 2024), investors will watch for cost discipline and balance-sheet stability in 2026.

Bottom line: Robinhood delivered another beat-and-raise quarter that cements its status as one of the market’s hottest growth stories. But after a 250% year-to-date rally and valuation multiples that price in near-perfection, the stock looks due for a pause. Technically, the $129–$130 zone is the first real test for bulls, while $120 remains the “line in the sand.” Long-term holders can take comfort in fundamentals that keep improving, but for short-term traders, the setup is simple: buy the dip only if the trend stays intact. This is still a rocket ship — it just needs a refueling stop.