Robinhood Shares Worth Buying After Recent Selloff and Earnings Update

Robinhood Markets Inc. (HOOD) has become far more than the meme-stock trading app it once was during the pandemic boom. After climbing 650% over the past two years—a run that outpaced even Nvidia and numerous artificial intelligence stocks—the fintech pioneer recently corrected roughly 50% from its October highs. This sharp pullback has created an intriguing entry point for investors considering long-term exposure to the company.

The recent earnings report in early February reinforced what analysts have been saying: Robinhood’s fundamental transformation is genuine and ongoing. The company now operates 11 separate business lines, each generating approximately $100 million or more in annualized revenues. This diversification extends well beyond commission-free stock trading, which Robinhood pioneered and which is now standard across the industry. Today’s Robinhood ecosystem includes retirement accounts, cryptocurrency trading, futures, options trading, wealth management tools, a desktop platform for active traders, and even prediction markets.

From Meme Stock App to Diversified Fintech Powerhouse

The scale of Robinhood’s user base expansion validates this transformation. In the third quarter, the company reported that paid Gold Subscribers surged 77% year-over-year to reach 3.9 million users. Total investment accounts climbed by 2.8 million, representing an 11% increase to 27.9 million accounts overall. Perhaps most notably, average revenue per user jumped 82% to $191 in that same quarter.

These metrics underscore why institutional investors and analysts increasingly view Robinhood as a direct competitor to established players like Fidelity, rather than a niche app for retail traders. The company gained admission to the S&P 500 in September, a milestone that further legitimizes its position as a major player in the digital brokerage space. When commission-free trading was standard only at Robinhood, the business model seemed risky. Today, that innovation is the floor, and multiple revenue streams provide the foundation for sustainable growth.

Valuation and Technical Setup Become Compelling

From a profitability perspective, Robinhood’s earnings trajectory has accelerated sharply. The company reported earnings per share of $0.61 in the third quarter, up 259% year-over-year and beating Wall Street expectations for the fourth quarter in a row with an average beat of 26%. Looking ahead, analysts project Robinhood will grow adjusted EPS by 85% in 2025 and another 23% in 2026, reaching $2.48 per share—a dramatic turnaround from the $0.60 loss in 2023 and $1.09 in 2024.

Revenue growth is similarly impressive. Robinhood is expected to deliver 53% revenue growth in 2025 and 22% higher sales in 2026, reaching $5.50 billion in total revenue compared to $2.95 billion in 2024. The company’s earnings forecast for 2026 has jumped 9% over the past few months and 63% since summer 2025.

The current price of approximately $75 per share stands significantly below analyst targets. The average Zacks price target implies 86% upside from current levels—representing substantial room for appreciation as the market reassesses the company’s potential. At today’s valuation, HOOD trades at 35.7x forward earnings, representing a 60% discount to its all-time highs. On a price-to-earnings-to-growth basis, the stock trades at a 1.3 PEG ratio, a 75% discount to earlier peaks and roughly in line with the broader tech sector.

The Case for Adding HOOD Shares Now

The current setup presents multiple attractions for investors. Technically, the stock is testing its post-IPO breakout levels from 2021 while displaying oversold RSI (Relative Strength Index) readings at historic extremes. These technical signals, combined with the fundamental strength of the business, suggest the recent decline may have created a compelling entry opportunity.

It’s important to note that Robinhood underwent a necessary correction after its October rally. The stock had become overextended relative to near-term fundamentals, and the pullback provided a healthy reset. However, the underlying business momentum remains intact. The company continues to expand its feature set, grow its user base, and increase monetization per user.

For investors considering HOOD shares, the risk-reward profile appears attractive at current levels. The combination of strong earnings growth, revenue expansion across multiple business lines, compelling valuation metrics, and technical positioning suggests this dip offers a reasonable entry point. While no stock is risk-free, Robinhood’s transformation into a diversified fintech leader with multiple revenue sources represents a meaningful shift from its early days as a single-feature trading app.