Robinhoodof the (NASDAQ: HOOD ) The stock is down more than 30% year to date. An event did not cause this reversal. Instead, it can be attributed to a cooling crypto market, slow retail trading, and concerns about its high valuations — all of which have forced investors to take some money off the table after the stock triples in 2025.
Yet Robin Hood’s stock has still more than doubled from its 2021 IPO price of $38 per share. Let’s review five reasons this fintech stock is worth buying because Bulls looks the other way.
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Robinhood’s commission-free trades and streamlined, gamified app drew many young retail investors away from traditional brokerages. From 2020 to 2025, its annual revenue more than quadrupled from $959 million to $4.5 billion, while the number of its funded customers doubled from 12.5 million to 27.0 million.
Robin Hood is also locking more customers into its Gold subscriptions, which offer interest-free margins, low margin rates, high interest on uninvested cash, and other perks of $5 a month or $50 a year. The number of its gold buyers grew 58% to 4.2 million in 2025, and this sticky ecosystem should widen its moat against other brokers.
Since its market launch, Robinhood has expanded its ecosystem with more crypto trading and staking, options trading, and card-based banking services. It has also launched AI-powered portfolio management tools, wealth management services, and tokenized assets.
It has acquired nearly a dozen companies since its IPO — including credit card company X1 Card, crypto exchanges WonderFi and Bitstamp, and wealth management platform TradePMR — to support its expansion. Over the next few years, it will likely continue to acquire other firms to reduce its reliance on its core brokerage services.
Robinhood has faced two major regulatory challenges in recent years: potential crackdowns on its “payment for order flow” (PFOF) business model, which subsidizes its free trade by selling its orders to high-frequency trading (HFT) firms; And stricter regulations for cryptocurrencies.
But under the Trump administration, the Securities and Exchange Commission (SEC) withdrew its proposed restrictions on PFOF trading and adopted a friendlier stance on cryptocurrencies. This is great news for Robinhood and other online exchanges.
Robinhood became profitable again by generally accepted accounting principles (GAAP) in 2024, and its EPS rose 31% in 2025. This growth was largely driven by higher interest rates, which boosted net interest income (from non-investment-grade customer cash, margin lending, and the brokerage swap program), which in turn fueled the crypto market as it warmed up. Options trading, and the development of Robin Hood’s gold. It also streamlined its costs, reduced its workforce, and reduced stock-based compensation expenses.
This strong financial discipline, along with its ongoing growth in customers and assets, boosted its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin from 16% in 2020 to 56% in 2025. Its net margin also expanded by 1% to 42%.
From 2025 to 2028, analysts expect Robinhood’s revenue and adjusted EBITDA to grow at CAGRs of 18% and 21%, respectively. This growth should support the development of its WonderFi and Bitstamp platforms in the hot crypto market, its global growth in Canada and Europe, the role of institutional-grade derivatives trading tools, and the use of advanced AI algorithms to automate its services and improve its trading tools.
With an enterprise value of $72 billion, it’s still worth a fair 22 times this year’s adjusted EBITDA. If it meets analysts’ expectations and trades at a more generous 25 times current-year adjusted EBITDA by early 2028, its stock could grow 56% over the next two years. That would easily top the S&P 500’s average annual return of about 10%.
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Leo Sun has no position in any of the listed stocks. The Motley Fool has no position in the stocks mentioned. Motley Fool has a disclosure policy.
5 Reasons to Buy Robin Hood (HOOD) Stock Like There’s No Tomorrow Originally Posted by The Motley Fool
