Robinhood Stock Drops Despite Earnings Beat, Trading Volume Slips to 23rd

On May 5, 2025, Robinhood Markets (HOOD) experienced a 1.11% decline in its stock price, with a trading volume of $17.53 billion, marking a 39.36% decrease from the previous day. This placed Robinhood at the 23rd position in terms of trading volume for the day.

Despite reporting first-quarter earnings that surpassed Wall Street expectations, Robinhood's stock has faced a decline. The company reported earnings per share of 37 cents, exceeding the consensus estimate of 32 cents, and revenue of $927 million, a 50% year-over-year increase driven by robust trading activity in crypto, options, and equities.

Robinhood highlighted a 77% increase in transaction-based revenue and a 70% growth in platform assets, aided by the TradePMR acquisition. The average revenue per user rose 39% to $145. CEO Vlad Tenev emphasized accelerating innovation, noting new initiatives like Robinhood Strategies, Banking, and Cortex.

Analysts have issued mixed reactions to the earnings report. JP Morgan noted that the earnings beat was partly tax-driven and flagged heavier expenses. Needham lowered its price target, citing softened crypto volumes and lower interest income. Piper Sandler and Goldman Sachs remained optimistic, pointing to user growth and traction in new products like futures and prediction markets.

Robinhood attracted a record $18 billion in net deposits, but potential trading slowdowns due to macroeconomic concerns like global tariffs have raised caution heading into the second quarter.