Robinhood Slump and Crypto Ghosts: A Gogol-esque Market Tale

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Markets

What to know:

  • Robinhood slid ten percent as the fourth-quarter ledger refused to smile on the wily numbers-men, delivering revenue of 1.28 billion-just shy of the town criers’ forecasts.
  • The crypto revenue slunk by 38% year over year to 221 million, pulling down transaction revenue and lending a chilly wind across EBITDA and net interest income.
  • JPMorgan trimmed its gaze, dialing the price target down to 113 from 130, citing moderating growth and crueler 2025 comparisons.

Robinhood (HOOD) shares sagged ten percent in the early hours, as the quarterly scroll failed to charm the merchants of forecast, while a late-year crypto lull draped the results in melancholy velvet.

The popular trading app announced fourth-quarter earnings per share of $0.66, pronging past the village soothsayers’ call of $0.63. Yet revenue stood at $1.28 billion, a touch beneath the pundits’ crystal ball of $1.33 billion.

A downturn in crypto trading pressed down on the ledger, with crypto revenue slipping 38% year over year to $221 million.

Wall Street bank JPMorgan trimmed its price target to $113 from $130, maintaining a neutral stance and warning that tougher 2025 comparisons would raise the bar for 2026, as if the town clerk had warned that the rope for hangings grows longer each year.

That new target still looms as potential upside of more than 50% from the current price of $76.50, which is to say, a fortune told by a fortune teller with bad handwriting.

Transaction revenue of $776 million fell short, driven by the crypto swoon to $221 million amid a late-year slide in digital asset markets. Net interest revenue of $411 million also missed estimates, strained by weaker securities lending and lower yields.

While January volumes showed year-over-year improvement, analysts led by Kenneth Worthington noted moderating growth across key metrics, prompting a trimming of top-line forecasts and a softened price target.

Compass Point’s Ed Engel offered a more hopeful lens, though he too reduced his price target to $127 from $170, while reiterating a Buy rating. He observed that January KPIs exhibited momentum across all segments-crypto volumes stronger than feared-despite the fourth quarter’s sting. Yet a 9% EBITDA miss, blamed on lower securities lending and slipping take rates in crypto and options trading, cast a pall over the feast.

The most surprising note, Engel said, was Robinhood’s 2026 operating expense guidance of 18% growth. He suspects spending will fund a grand expansion in crypto, DeFi, and prediction markets, which might bloom in the latter half of 2026. Until then, investors may lower EBITDA expectations as if they were tallying the number of steps to the gallows.

He pointed to the internalization of prediction markets, a potential Trump-related user bump, and possible mega-IPOs from SpaceX, Anthropic, or OpenAI as longer-term tailwinds, like sparrows in a windy marketplace.

He also noted that Robinhood’s crypto take rate declined by 3 basis points quarter-over-quarter in the fourth quarter and has fallen an additional 5 basis points so far in 2026 as higher-volume traders form a larger share of the crowd.

Engel: “In the near term, investors may scold HOOD for the heavier spending, but sentiment could rise again by mid-2026 as investment returns begin to materialize.”

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2026-02-11 18:27