SUQIAN, CHINA – JULY 5, 2025 – A Robinhood LOGO displayed on a smartphone in Suqian City, Jiangsu Province on China, July 5, 2025. (Photo credit should read CFOTO/Future Publishing via Getty Images)
CFOTO/Future Publishing via Getty Images
Robinhood Markets (NASDAQ:HOOD) stock increased by nearly 14% over the last month and is up approximately 170% year-to-date in 2025. What is fueling this surge? Robinhood is experiencing robust earnings momentum, expanding its customer base, and making significant moves in the booming cryptocurrency sector.
Impressive Q2 Earnings
Last week, the company announced a set of results for Q2 2025 that exceeded expectations. Revenues increased by 45% compared to the previous year, totaling $989 million, while adjusted earnings nearly doubled to $0.42 per share. Transaction-based revenues continue to be Robinhood’s primary sales driver, showing strong growth at 65% year-over-year. On the user front, funded customers grew by 2.3 million, reaching 26.5 million. Additionally, total platform assets nearly doubled, rising by 99% from a year ago to $279 billion, propelled by significant net deposits, acquired assets, and improved equity and cryptocurrency valuations. This increase is crucial, as a larger asset base enhances Robinhood’s capacity to generate revenue through trading activities, interest income, and advisory services.
Cryptocurrency Expansion
In recent quarters, Robinhood has been intensifying its focus on crypto assets. Revenue from cryptocurrencies surged by 98% to $160 million, coming very close to achieving the sixth consecutive quarter of triple-digit growth, and the company has been expanding its operations in this domain. It finalized its purchase of global cryptocurrency exchange operator Bitstamp, which provides it with over 50 active licenses and registrations internationally, while also strengthening its enterprise efforts by enhancing its lending and staking infrastructure and offering more specialized products tailored for hedge funds, fintechs, and registered investment advisors. Furthermore, the markets have been increasingly paying attention to the crypto narrative in recent months, boosted by a more favorable regulatory environment and heightened support from the Trump administration, which has benefited the stock.
Fostering Loyalty as Users Accumulate Wealth
Robinhood’s user demographic is predominantly composed of millennials and younger investors. A significant wealth transfer is anticipated as older generations pass down assets to millennials and Gen Z over the next two decades, amounting to tens of trillions of dollars. By onboarding these users early, Robinhood positions itself to gain from their growing asset and investment needs over time. As millennials mature, their financial requirements are likely to become more diverse. To address this, Robinhood has started providing products that go beyond trading—such as retirement accounts, high-yield cash balances, and wealth management tools—to retain users as their financial sophistication progresses.
Is HOOD attractive at its current price of around $107 per share? Robinhood stock benefits from positive momentum, with impressive recent growth and margins, though certain risks are potential considerations for investors. Nonetheless, for those who prefer lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative that has outperformed the S&P 500 and provided returns exceeding 91% since its inception.
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How Does the Valuation of Robinhood Markets Compare to the S&P 500?
When assessed based on what you pay per dollar of sales or profit, HOOD stock appears to be quite pricey compared to the broader market.
• Robinhood Markets has a price-to-sales (P/S) ratio of 28.9 compared to 3.0 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio stands at 89.1 against 20.6 for the S&P 500
• Moreover, it has a price-to-earnings (P/E) ratio of 59.2 compared to the benchmark’s 22.8
How Have the Revenues of Robinhood Markets Changed Over Recent Years?
The Revenues of Robinhood Markets have experienced considerable growth over recent years.
• Robinhood Markets has seen its top line increase by an average rate of 30.0% over the last 3 years (compared to a growth of 5.2% for S&P 500)
• Its revenues have expanded 59.6% from $2.0 billion to $3.3 billion in the last 12 months (compared to a rise of 4.4% for S&P 500)
• Additionally, its quarterly revenues have risen by 50.0% to $927 million in the most recent quarter from $618 million a year prior (compared to a 4.1% improvement for S&P 500)
What Is the Profitability of Robinhood Markets?
The profit margins of Robinhood Markets exceed those of most companies in the Trefis coverage universe.
• The Operating Income of Robinhood Markets over the last four quarters was $1.3 billion, reflecting a notably high Operating Margin of 39.0% (compared to 18.4% for S&P 500)
• For the latest four-quarter period, the Net Income of Robinhood Markets was $1.6 billion—indicating a substantially high Net Income Margin of 48.8% (versus 12.0% for S&P 500)
How Resilient Is HOOD Stock During Economic Downturns?
HOOD stock has performed significantly worse than the benchmark S&P 500 index during some recent downturns. While investors are hopeful for a soft landing in the U.S. economy, how severe might the situation become if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash showcases how major stocks performed during and after the last six market crashes.
Inflation Shock (2022)
• HOOD stock declined 90.2% from a high of $70.39 on 4 August 2021 to $6.89 on 16 June 2022, compared to a peak-to-trough drop of 25.4% for the S&P 500
• The stock fully recovered to its previous peak by 3 June 2025
• Since then, the stock has risen to a peak of $109.74 on 20 July 2025 and currently trades around $105
Connecting The Dots: Implications For HOOD Stock
In spite of its elevated valuation, Robinhood’s robust growth, solid margins, and improving profitability render the stock appealing.
While HOOD stock appears attractive, investing in a single stock carries risks. Alternatively, the Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has demonstrated a history of consistently outperforming the S&P 500 over the past four years. Why is this so? As a collective, HQ Portfolio stocks have offered superior returns with lower risk in comparison to the benchmark index; providing a smoother investment journey, as evidenced by the HQ Portfolio performance metrics.