Bernstein analyst Gautam Chhugani “sees no point in turning negative” on Robinhood (NASDAQ: HOOD) even though the company posted weaker-than-expected Q4 revenue today.
On Feb. 11, the fintech reported $1.28 billion in revenue for its fourth quarter – missing consensus by some $70 million.
Still, Chhugani recommended sticking with HOOD shares in a research report this morning, saying they’re “closer to the bottom” now.
According to the Bernstein analyst, much of the Q4 weakness was related to “crypto jitters”, which he believes will prove temporary only.
Note that Robinhood stock has been cut in half since early October.
Prediction markets remain a major tailwind for HOOD stock
Robinhood said crypto trading volumes were down an alarming 38% year-on-year in its fiscal Q4.
However, Chhugani sees a sharp recovery starting in the second quarter, positioning HOOD stock as the primary gateway for returning retail liquidity.
In his research note, the analyst also pointed to “Prediction Markets” as a hidden crown jewel.
Already on track to become a billion-dollar annual business, this segment is expected to “spring a big 2026 surprise,” he noted.
By diversifying away from “buy and hold” and into event-based contracts, Robinhood is building a high-velocity revenue stream that could push its share price up to a new all-time high of “$160” this year, Chhugani told clients.
Recent data warrants investing in Robinhood shares
Long-term investors should consider buying Robinhood shares on the post-earnings weakness, also because the softness in net new assets (NNAs) seems to be easing now.
February data suggests a significant reacceleration in asset inflows, proving Robinhood’s “sticky” ecosystem – now boasting over 4.2 million Gold Subscribers – is still attracting capital.
With platform assets surging 68% year-over-year to $324 billion, HOOD is no longer just a “meme stock” playground; it has evolved into a full-scale financial super-app.
This massive asset base provides a stable foundation of interest income and subscription fees that cushions the blow during volatile trading cycles.
Robinhood is now cheaper to own than SoFi stock
Robinhood is aggressively investing in new offerings like “Cortex” and “Index Options” to move up the food chain and capture sophisticated traders.
Its management is committed to scaling the firm’s high-yield “Gold Card” to more than 1 million users by the end of this year as well.
Still, it guided for a future where revenue growth will continue to exceed expenses on Wednesday, making HOOD shares even more attractive as a long-term holding.
The recent crypto-driven crash in Robinhood has trimmed its forward price-to-earnings (P/E) ratio to about “34”, which makes it cheaper to own than rivals, including SoFi Technologies.
What’s also worth mentioning is that HOOD’s relative strength index (14-day) now sits at roughly “28”, indicating the bearish momentum is approaching exhaustion now – and a near-term rebound is likely.
In conclusion, Robinhood Markets looks positioned for an “explosive rally” once trading volumes return.
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