Bernstein sees Robinhood Q1 miss as priced in, maintains $130 target implying 58% upside

Analysts at research and brokerage firm Bernstein maintained their long-standing bullish stance on Robinhood, arguing the stock had already bottomed in the first quarter even as it tumbled Tuesday amid the company's quarterly results that fell short of Wall Street estimates.

The U.S.-based trading app reported Q1 revenue of $1.067 billion, a 7% miss versus estimates, alongside adjusted EPS of $0.39, and adjusted EBITDA of $534 million, which Bernstein said missed expectations by 8% and 9%, respectively.

Shares of Robinhood fell over 6% in after-hours trading before recovering part of the losses. The stock closed at $82.07 on Tuesday.

In a note to clients on Wednesday, Bernstein analysts led by Gautam Chhugani said the weak Q1 numbers were already factored into the share price. The analysts noted that while crypto revenue fell to $134 million, accounting for just 13% of total revenue versus 17% in Q4 2025, the segment stabilized in April.

The analysts highlighted that several platform metrics expanded despite the retail trading slowdown. Robinhood’s margin book reached a record $17.0 billion, a 93% increase from the prior year. April activity, they said, showed equity and options volumes tracking toward the strongest month of the year, while prediction markets were pacing toward approximately $3 billion in contracts.

Additionally, Robinhood Gold subscribers grew 36% year-over-year to 4.34 million, representing a 16% adoption rate among the platform's 27.4 million funded accounts.

Prediction markets and expansion into public sector

Prediction markets emerged as a primary growth driver, with event contracts trading a record 8.8 billion units in Q1. This segment contributed $415 million in annualized revenue, representing 17% of total transaction-based revenue, according to the note.

Chhugani pointed to the upcoming mid-2026 launch of Rothera, a joint venture exchange with Susquehanna that is expected to move Robinhood away from third-party venues like Kalshi, allowing the company to control pricing and product selection for event contracts.

The analysts also highlighted Robinhood's appointment as the sole initial trustee for "Trump Accounts," a new initiative in collaboration with BNY. Approximately 5.5 million children have signed up for the program out of an eligible pool of 60 million.

Robinhood expects to invest $100 million into the vertical, adjusting its 2026 operating expense guidance to a range of $2.7 billion to $2.825 billion, per the note. 

Bernstein reiterated its outperform rating and $130 price target on Robinhood, implying 58% upside from the April 28 close, and maintained that asymmetric upside is being driven by prediction markets and a stabilization in crypto trading activity.

Gautam Chhugani maintains long positions in various cryptocurrencies. Certain affiliates of Bernstein act as market makers or liquidity providers in the equity securities of Robinhood.