Robinhood (HOOD) Stock: Analysts Raise Targets After Post-Earnings Drop – Time To Buy?

TLDR

• Robinhood Markets is launching a closed-end fund through Robinhood Ventures to let retail investors buy shares in private AI startups.
• The fund will invest in five or more private companies, but shares cannot be easily sold or redeemed at any time.
• CEO Vlad Tenev dismissed AI bubble concerns, stating retail customers are buying heavily into the AI trend.
• HOOD stock dropped 11% after Q3 earnings despite posting 100% revenue growth to $1.27 billion.
• Analysts raised price targets by an average of 13% following the post-earnings drop, with updated forecasts suggesting 24% upside potential.

Robinhood Markets filed with the SEC in October to launch Robinhood Ventures Fund I, a closed-end investment fund that will let retail investors access private AI companies. The fund will invest in at least five private companies.

Robinhood Markets, Inc., HOOD

The shares in this fund cannot be easily sold or redeemed. If too many investors try to withdraw money at once, they could face problems getting their funds out.

CEO Vlad Tenev told the Financial Times he wants to give everyday people access to fast-growing private AI companies. He said he’s not worried about a potential bubble in the sector.

Tenev noted that Robinhood customers are buying heavily into AI investments. He said retail investors understand these investments are risky and could lose all their value.

Strong Revenue Growth Meets Market Concerns

Robinhood reported Q3 revenue of $1.27 billion on November 6, beating estimates of $1.15 billion. This represented 100% growth compared to the previous year.

The company’s diluted earnings per share tripled to 61 cents. Adjusted EBITDA margin rose to 58% from 42% a year earlier.

Transaction revenues jumped 129% in the quarter. Crypto revenues led the growth with a 300% increase from the previous year.

Equity revenues rose 132% while options revenues increased 50%. Average revenue per user climbed 82% to $191.

Post-Earnings Drop Despite Strong Numbers

HOOD stock fell nearly 11% on November 6 after the earnings release. This marked the largest single-day decline since March 10.

The drop came despite the strong headline numbers. Crypto revenue came in lower than expected, which concerned investors since crypto drives much of the company’s growth.

The earnings beat was inflated by a lower-than-expected tax rate. This didn’t reflect true operational performance.

Robinhood also increased its expense outlook for 2025. The company plans to invest more in prediction markets and Robinhood Ventures.

Crypto assets also fell on November 6. This added to the pressure on Robinhood shares.

The stock remains up over 200% in 2025. It sits only 17% below its all-time high.

Analysts who updated their targets on November 6 raised them by an average of 13%. The average price target among these updated forecasts stands at $157.50, suggesting 24% upside.

The consensus price target from MarketBeat is just over $132. TipRanks shows a Moderate Buy rating based on 13 Buy ratings, five Hold ratings, and one Sell rating.

Robinhood now operates 11 separate business lines that each generate $100 million or more in annual revenue. Prediction markets volume has doubled every quarter since the 2024 election.

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