Key Takeaways
- Robinhood’s quarterly revenue roughly doubled from $0.64 billion in Q3 2024 to a record $1.31 billion in Q2 2026, up 32% year over year.
- HOOD stock’s NTM P/E has fallen from 72.82x at the end of September 2025 to 40.49x, even as Q2 2026 revenue reached a record high.
- The Q1 2026 drop to $1.07 billion, about 16% below the prior quarter, shows that quarterly results remain sensitive to trading activity.
Robinhood Is the Bubble’s Poster Child, but HOOD Stock Already Lost Its Bubble Multiple
Robinhood Markets (HOOD) landed near the center of a fresh bubble warning on September 24, when Reuters Breakingviews columnist Edward Chancellor declared that the “Everything Bubble” had returned “with a vengeance.” His case leaned on the app that powered the 2021 meme-stock frenzy, which generated more revenue from prediction-market event contracts than from crypto trading in Q2.
The week around that column added to the unease. On September 21, CEO Vlad Tenev sold 259,166 shares under a Rule 10b5-1 plan adopted in September 2025. The shares converted automatically from Class B to Class A when sold, at weighted-average prices of $125.55 and $126.15, for about $32.6 million. He sold a further 240,834 shares under the same plan the next day. Similarly, CFO Shiv Verma had sold 11,472 shares on September 15.
The operating record reads steadier than the headlines. Revenue climbed from $0.64 billion in Q3 2024 to $1.01 billion a quarter later, then to a record $1.31 billion in Q2 2026, 32% above the $0.99 billion from a year earlier. Adjusted EBITDA reached $741 million in Q2, a 57% margin, and management lowered its 2026 adjusted operating expense and stock-based compensation outlook to $2.675 billion to $2.775 billion.
What gets missed is how much froth has already drained out of the stock. HOOD traded at 72.82x NTM normalized earnings at the end of September 2025 and peaked at 75.51x that autumn. The multiple then slid to 27.53x by the end of March 2026 before recovering to 40.49x today. At $119.40, that multiple implies roughly $2.95 in next-twelve-month normalized earnings per share, a calculation from TIKR data rather than company guidance.
That compression happened during a period of strong year-over-year revenue growth, culminating in a record Q2. A bubble stock gets cheaper when the story breaks. Robinhood got cheaper while the business grew, meaning investors are paying a lower earnings multiple than they did a year ago.
A 40x Multiple Still Leaves Little Room for Another Q1
The evidence supports a narrower judgment than the bubble framing implies. Robinhood no longer trades like a speculative craze, but at 40.49x it still sits about 13% above its 35.98x average over roughly the past three years. That is not a discount price, and it assumes earnings keep growing.
Q1 2026 showed why that assumption carries risk. Revenue fell to $1.07 billion from $1.28 billion the quarter before, and adjusted EBITDA fell to $534 million. Both results came in below then-current Street expectations. Trading volumes still decide the quarter.
Management points to steadier engines: 4.8 million Gold subscribers, more than 1 million Gold Card holders, over $3 billion in banking deposits and nearly $1.5 billion already contributed to Trump Accounts. Those lines are growing, but the Q1 dip showed they do not yet offset a slowdown in trading.
The fastest-growing piece also carries legal risk. On August 28, the Ninth Circuit ruled that Kalshi could not block Nevada gaming regulators from overseeing its sports-event contracts. On September 16, a separate Ninth Circuit panel reversed a lower court’s denial of a preliminary injunction sought by two California tribes. It held that the tribes were likely to succeed on their claim that Kalshi’s sports-event contracts violated the Indian Gaming Regulatory Act, then sent the case back to consider the remaining injunction factors. Robinhood, which distributes Kalshi contracts, said it was evaluating its legal options and had “great respect for Native American tribes and their sovereignty.”
The Q3 report is the next test. Management said July volumes for equities, options and event contracts were tracking near Q2 levels, crypto was slower, and July net deposits were heading toward about $4 billion. Revenue holding near Q2’s $1.31 billion, alongside net deposits on pace for management’s 20% annual growth target, would support the current multiple. A Q1-style drop would show that HOOD’s valuation still depends on how active its traders feel.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
