Robinhood set for recovery after Q1 miss as Bernstein maintains $130 price target

Robinhood is positioned for a rebound following a challenging first quarter, during which crypto-driven revenue plummeted 47%, according to research and brokerage firm Bernstein. On Wednesday, Bernstein reaffirmed its “outperform” rating on Robinhood and maintained a $130 share price target, arguing that the stock is poised to nearly double after hitting a low point—even after a disappointing Q1 earnings call sent HOOD shares down 8%.

The analysts, including Gautam Chhugani, noted that the top-line weakness was primarily driven by the broader crypto market downturn. Despite the S&P 500 reaching new highs, the crypto industry has seen $1.5 trillion in value evaporate. Bitcoin remains 40% below its peak, while many other tokens have declined by over 75%.

However, Bernstein emphasizes that investors may be focusing too much on past performance, particularly as shares fell an additional 8% in after-hours trading following Robinhood’s revenue and earnings miss.

“Crypto has stabilised in April and HOOD’s own prediction markets exchange — Rothera — is expected to go live mid-2026,” the analysts stated.

The company has also taken steps to bolster its financial position, repurchasing over $300 million of stock so far this year and refreshing its buyback authorization to $1.5 billion.

Chief Executive Vlad Tenev has consistently emphasized a shift in narrative, moving away from Bitcoin price cycles toward infrastructure and long-term financial services.

Robinhood’s Q1 Performance: Mixed Results

On Tuesday, Robinhood reported adjusted earnings per share of $0.39, missing estimates by nearly 10%. Total revenue of approximately $1.1 billion fell 7% short of expectations, while adjusted EBITDA of $534 million missed Wall Street projections by 9%.

Despite these setbacks, the broader business showed resilience. Total revenue grew 15% year-over-year, and transaction-based revenue rose to $623 million, driven by a record surge in prediction markets trading. Robinhood users traded 8.8 billion event contracts in the quarter, pushing “other transaction revenue” up 320% year-on-year to $147 million.

Additionally, Robinhood Banking has expanded significantly, with net deposits exceeding $2 billion and a 40% direct deposit attach rate. The Gold credit card has surpassed 800,000 users, with an annualized purchase volume of $15 billion.

Bernstein’s Bullish Outlook for 2026

Bernstein forecasts full-year 2026 earnings per share of $2.65, which is 23% ahead of consensus estimates. The firm attributes this upside to a potential recovery in crypto markets and a breakout year for prediction markets.

Robinhood is also investing in artificial intelligence tools to enhance product features and operational efficiency. Management reports that over 90% of employees now utilize AI tooling.

About the Analyst

Lance Datskoluo is DL News’ Europe-based markets correspondent. For tips or inquiries, email him at [email protected].