Analysts at Bernstein, a research and brokerage firm, maintained their long-standing bullish stance on Robinhood, believing the stock has already bottomed out in the first quarter, despite a sharp decline in its share price following the company’s quarterly earnings report on Tuesday, which fell short of Wall Street’s expectations.
The U.S.-based trading app reported first-quarter revenue of $1.067 billion; earnings per share fell 7% compared to expectations, at $0.39 adjusted EPS, and adjusted EBITDA was $534 million, with Bernstein noting that both figures were 8% and 9% below expectations, respectively.
According to The Block, Robinhood's stock dropped more than 6% in after-hours trading before recovering some of those losses. Engine price page The stock closed at $82.07 on Tuesday.
Bernstein analyst Gautam Chhugani and his team noted in a client report on Wednesday that the weak first-quarter results have already been priced in by the market. The analysts pointed out that, despite crypto revenue declining to $134 million, accounting for only 13% of total revenue (compared to 17% in Q4 2025), the segment stabilized in April.
Analysts noted that despite a slowdown in retail trading, multiple platform metrics still showed growth. Robinhood’s margin account size reached a record $17 billion, a 93% increase year-over-year. They stated that stock and options trading volumes in April are on track to reach the highest levels of the year, while the notional value of prediction market contracts is nearing $3 billion.
Additionally, subscription users of Robinhood Gold increased by 36% year-over-year to 4.34 million, representing 16% of the platform’s 27.4 million funded accounts.
Prediction markets and expansion into the public sector
Prediction markets became a primary growth driver, with event contracts reaching a record trading volume of 8.8 billion in the first quarter. The report showed that this segment generated $415 million in annualized revenue, accounting for 17% of total trading revenue.
Chhugani noted that Rothera, set to launch in mid-2026, is a joint venture with Susquehanna and is expected to allow Robinhood to move away from third-party venues like Kalshi, giving the company control over pricing and product selection for activity contracts.
Analysts also highlighted that Robinhood was appointed as the sole initial trustee for the "Trump account," a new initiative launched in collaboration with a New York bank. Approximately 5.5 million children out of 60 million eligible children have enrolled in the program.
According to the announcement, Robinhood expects to invest $100 million in this vertical and has adjusted its 2026 operating expense guidance to $2.7 billion to $2.825 billion.
Bernstein reaffirmed its “outperform” rating and $130 price target for Robinhood, implying a 58% upside from the April 28 closing price, and maintained that this asymmetric upside is driven by stable performance in prediction markets and cryptocurrency trading activity.
Gautam Chhugani holds long positions in multiple cryptocurrencies. Certain affiliated companies of Bernstein act as market makers or liquidity providers in Robinhood's stock trading.