What Could Go Wrong With Robinhood Stock

For questions about this article or underlying research, email [email protected].

Robinhood Markets (HOOD) reported record revenue for its third quarter on October 27, 2026. For a holder, however, the pace of that sales growth is the number to worry about. The stock trades at 37.9 times earnings, compared with 22.8 for the S&P 500. A price like that likely assumes sales keep growing far faster than the market's. So how far has Robinhood's sales growth slowed?

Robinhood's Sales Growth Is Its Slowest In Five Quarters

Robinhood generated $1.42 billion in revenue during the third quarter of fiscal 2026, an 11.8% increase from a year earlier. A year before that, in the third quarter of fiscal 2025, sales had grown 100.0%. The slowdown has not followed a straight line, however. Growth eased to 26.5% in the fourth quarter of fiscal 2025 and to 15.1% in the first quarter of fiscal 2026. The rate then picked up to 32.3% in the second quarter before dropping again.

The twelve-month figures also show slower growth. Robinhood's revenue grew 20.9% in the twelve months to September 2026, compared with 74.6% in the twelve months before. Sales are still rising, but at less than a third of the pace of a year ago.

Robinhood's Net Income And Its Stock Both Fell

Robinhood's net income fell to $468 million in the third quarter from $556 million a year earlier, even as revenue rose. The company's operating margin slipped to 48.1%, down from 49.8% in the same quarter of 2025. Robinhood's operating income still rose in the quarter, however, climbing to $685 million from $635 million a year earlier. Over the twelve months to September, operating income rose to $2.32 billion from $2.0 billion.

The stock has trailed the business. Since October 30, 2025, Robinhood stock has fallen 39.3%, while the S&P 500 returned 11.8%. Even after that fall, the shares cost far more per dollar of earnings than the index does.

Customers Are Still Adding Money At Robinhood

The best case against the worry is that customers keep bringing money to Robinhood. During the October 27 call, management said third-quarter net deposits were $16 billion. Management also said the company had already passed its goal of 20% net deposit growth for the year, with two months left. Robinhood Gold subscribers reached a record 5.2 million, the company said.

Robinhood is also winning business from rivals and adding new products. Management said market share rose by double digits from a year earlier in equities, options, crypto and margin. During its first quarter, the new Robinhood Chain handled $100 billion in decentralized exchange trading volume, management said. Robinhood also keeps far more of its sales as profit than most companies. Over the twelve months, its operating margin was 45.7%, compared with 18.6% for the S&P 500.

This dynamic makes the slowdown a risk to weigh rather than a sign of a shrinking business, since sales are still rising and customers keep adding money. Robinhood is expected to report its fourth quarter in February 2027, and its revenue growth from a year earlier is the figure to watch.

Beyond HOOD: A Systematic Way To Invest

Before you decide on HOOD, consider a better choice. Since its September 2020 launch, the Trefis High Quality (HQ) Portfolio has returned 105%, ahead of a benchmark that combines the S&P 500, S&P MidCap and Russell 2000, without betting on one stock.

See The HQ Portfolio

Spot an error or want more like this? Tell us in 10 seconds.