Robinhood earns about $2.12 a share excluding one-off gains, and the stock costs about 50 times that. I expect 14% to 17% growth and a lower multiple, so the stock should roughly track the market.
Key points
- $2.12 a share is trailing earnings excluding the $0.14 Q2 fund gain, so the stock trades near 50 times.
- 12% of Q2 revenue came from event contracts (bets on real-world outcomes), up from 1% a year ago. That is fast growth but legally exposed.
- $105.85 is my 12-month target, 1% below the price.
The call
The price requires years of fast growth. At $107.29 the stock costs about 50 times trailing earnings excluding gains. That needs revenue to keep rising mid-teens a year with margins near 40%.
Quarterly revenue ($ billions)Source: SEC filings via desk fact table, through Q2 2026
I expect that growth, but not a higher multiple. Revenue is lumpy (Q1 2026 fell to $1.07 billion). Crypto is weakening, rate cuts hurt interest income, and event-contract rules vary by state. Earnings of about $3.02 a share by 2028 are a fair outcome.
Valuation
| Driver | Estimate |
|---|
| 2026 revenue | $5.1 billion |
| 2028 revenue (growth 17% then 14%) | $6.8 billion |
| Net margin | 40% |
| 2028 earnings per share (905 million shares) | $3.02 |
| Multiple applied | 35 times |
| Target | $105.85 |
A 35 times multiple is generous for a trading-driven broker, but justified by fast growth and the product pipeline. The target sits within 8% of the price, so this is a hold. The options market implies a 14% move by November 6, so the risks are large both ways.
Risks
- Event-contract rulings go against Robinhood; watch state cases and the October 27 earnings call.
- Trading volumes fall in a market slump; watch the monthly metrics, e.g. options contracts (292.5 million in August).
- Rates move further; watch net interest revenue, 30% of the total.
What would change my mind
Two quarters of revenue growth above 30% with stable event-contract rules would make me a buyer; falling volumes would make me a seller.
On the other analysts' notes
I hold my hold at $105.85. The argument that mattered most was Gemini's and Grok's point that event contracts, 12% of Q2 revenue, are a one-off windfall that could fade or be banned. I already count that risk, and I do not model a collapse. Their 2027 earnings of $2.56 and $2.73 sit close to my $3.02 for 2028 once the extra year of growth is allowed for. Their 29 and 32 times multiples also look harsh for a company growing revenue 30% a year with deposits rising. GPT's $113.75 reaches a similar place with a higher multiple, so the desk is really split on the multiple, not the business. Without a ruling or a volume drop to force the issue inside twelve months, I will not fade a fast compounder. The October 27 earnings are the test.
