Markets Think Robinhood Earnings Could Send the Stock Up

Key Points

• Robinhood stock is showing signs of a potential earnings beat to come this quarter, giving investors a chance at a new bull run.
• Wall Street analysts have spotted the trend in the underlying business during all this new S&P 500 volatility.
• Institutions are buying ahead of earnings, and markets are placing a steep premium on the stock as well.

Whenever markets start to behave a certain way around a stock, especially during earnings season, investors usually benefit greatly from reverse-engineering the views taken ahead of the biggest catalyst of the quarter. Typically, there are both technical and fundamental reasons behind the way markets like to treat and value a certain stock (or sector, for that matter), and today, investors have an opportunity to ride this bullish wave.

Spotting a particular behavior around one of the most popular names in the financial sector seems like  a no-brainer, as these stocks are ultimately the better hedge against the ongoing volatility caused by President Trump’s rollout of trade tariffs, since they do not operate in a way that could affect them. Having set the foundational pillar of strength to start looking into the sector, now investors can drill down into specifics.

The specifics will eventually show them why shares of Robinhood Markets Inc. NASDAQ: HOOD are at the top of the list for those bullish market participants who are only waiting for the volatility to subside and then get a payoff relative to the patience and savviness involved with investing in such a negative and volatility-driven market nowadays.

Robinhood Stock: A Premium Choice In Volatile Markets

When it comes to the retail investor of today’s market and economy, there are very few platforms that compare to Robinhood and its popularity among its audience. This is something investors can see every time quarterly results are reported, as they carry double-digit growth rates for users and funded accounts.

Robinhood Earnings Call April 30 

That being said, there’s also a fundamental truth to what the next quarter might bring for Robinhood’s business. Investors can already expect to see continued user growth and deposits. Still, there’s a truth to the fees generated during this past quarter that might not be so obvious to most investors.

With markets being this volatile and Robinhood controlling the majority of the retail investor market, it makes sense to expect higher fees on the relatively high trading volume that the platform can generate, especially now that it has launched a futures trading offer for its customers as well.

Over the past few years, retail investors have become more active in trading options and futures contracts in financial markets. Robinhood spotted this trend from a mile away, and it's also the reason why markets are now willing to pay as much as 29.6x in price-to-earnings (P/E) multiples.

What’s the Market’s Take on Robinhood’s Future?

Not only is this valuation multiple a significant premium to the rest of the financial sector’s average valuation of 22.0x P/E, indicating that the market must have a very good reason to be willing to overpay this much for Robinhood’s business and underlying future earnings.

The price action tells a similar story here. Over the past month, Robinhood stock has managed to outperform the broader S&P 500 index by as much as 6%, which says volumes about what could come next for this broker and trading platform, as there is a clear preference for this stock over the rest of the stock market.

More than that, investors have to account for the massive 158.5% performance Robinhood delivered over the past 12 months, leaving not only the market but pretty much all other peers in the dust as it still runs to higher prices. This momentum and fundamental back-up have also attracted new money to pour in the stock recently.

Confidence is clearly building for Robinhood’s future. Up to $4.2 billion of institutional capital came in from buyers over the past quarter, with an additional $230 million this quarter (which is made up of only April thus far), a clear sign of better things to come.

There is also another sentiment gauge to consider in Robinhood stock, and this one is coming from Wall Street analysts. While the consensus price target is still set at only $53.88 per share today, some analysts are willing to back Robinhood with as much confidence as anyone can have during a volatile market like today’s.

Those from JMP Securities decided that the underlying developments at Robinhood were enough justification for keeping their Market Outperform rating on the stock while also placing a $70 per share valuation on it (making it the second highest). Considering the timing of this rating, April 2025, it seems clear that Wall Street expects the company to report a favorable quarter in the coming weeks, perhaps sending the stock to these valuations, if not higher.