Robinhood target maintained as Bernstein backs upside after earnings miss

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Robinhood target after earnings miss

Highlights

Robinhood's Q1 revenue of $1.067 billion misses estimates by 7%, with adjusted EPS of $0.39 and EBITDA of $534 million also below expectations.
Prediction markets generate record 8.8 billion units and $415 million annualized revenue, now accounting for 17% of transaction-based revenue, while margin book rises 93% to $17.0 billion.
Bernstein reiterates $130 price target (58% upside), citing 2026 Rothera joint venture launch, Trump Accounts traction, and operating expense guidance of $2.7–$2.825 billion.

Quarterly miss and growth drivers

As reported by The Block, Bernstein analysts led by Gautam Chhugani say Robinhood's first-quarter revenue of $1.067 billion misses estimates by 7%, while adjusted EPS of $0.39 and adjusted EBITDA of $534 million also come in below expectations.

The analysts argue the softer quarter is already priced into the shares. Robinhood stock falls more than 6% in after-hours trading before recovering part of the decline, after closing at $82.07 on Tuesday.

Bernstein says several operating indicators continue to improve despite a broader slowdown in retail trading. Robinhood's margin book reaches a record $17.0 billion, up 93% from a year earlier, while Robinhood Gold subscribers rise 36% to 4.34 million, equal to a 16% adoption rate across 27.4 million funded accounts.

Prediction markets stand out as a key source of expansion. Event contracts trade a record 8.8 billion units in the first quarter and generate $415 million in annualized revenue, representing 17% of total transaction-based revenue.

Platform expansion and 2026 outlook

Bernstein says April trading activity points to stronger momentum, with equity and options volumes tracking toward the strongest month of the year and prediction markets pacing toward about $3 billion in contracts.

Crypto revenue falls to $134 million, or 13% of total revenue compared with 17% in the fourth quarter of 2025, but the analysts say the segment stabilizes in April. They also point to the planned mid-2026 launch of Rothera, Robinhood's joint venture exchange with Susquehanna, which is expected to reduce reliance on third-party venues such as Kalshi and give the company greater control over pricing and product selection for event contracts.

Bernstein also highlights Robinhood's role as the sole initial trustee for Trump Accounts, an initiative with BNY. About 5.5 million children sign up for the program from an eligible pool of 60 million, while Robinhood plans to invest $100 million in the vertical and adjusts its 2026 operating expense guidance to $2.7 billion to $2.825 billion.

The firm reiterates its outperform rating and $130 price target, implying 58% upside from the April 28 close. Bernstein says the risk-reward profile remains favorable as prediction markets scale and crypto trading shows signs of stabilization.

Our earlier coverage of Polymarket’s bid to return to the U.S. market explained that the company has been in talks with the CFTC about lifting the U.S. trading ban imposed after its 2022 settlement, which could reopen access to its main exchange. We also noted that heightened scrutiny from state authorities and questions around CFTC oversight are shaping how prediction-market platforms such as Polymarket and Kalshi compete for domestic event-contract volume.

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