HOOD Stock Tumbles Overnight On Revenue Miss: Retail Sees ‘Easy Money’ On ‘Complete Overreaction’

• Robinhood posted record third-quarter revenue of $1.42 billion, though it missed Wall Street estimates. 
• The brokerage firm posted adjusted earnings of $0.60 a share. 
• Robinhood's transaction-based revenue grew about 19% to $867 million, prediction markets revenue jumped to $173 million, and options revenue surged 31%. 

Shares of Robinhood Markets Inc. (HOOD) plunged nearly 8% in the overnight session late Tuesday after the brokerage firm’s third-quarter (Q3) revenue missed Wall Street expectations. 

However, retail traders stayed firmly optimistic, with sentiment flipping from ‘bearish’ to ‘extremely bullish’ over 24 hours as many called to “buy the dip.”

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Why Is Retail Bullish On Robinhood?

Despite an overnight dip, retail users highlighted the company’s growing product base, prediction market success, and rising assets and deposits, among other factors, as key catalysts. 

One user said, “$HOOD It’s basically the go-to app for younger investors, and they’re stacking more products on top of that base every year. Gold subs, prediction markets, crypto, interest income, the works. Assets and deposits keep growing and Wall Street still sees solid upside. It’s a money making machine.”

Another user said, “$HOOD now has 14 businesses generating over $100M in annualized revenue, with prediction markets alone bringing in $173M last quarter and surpassing both stock and crypto trading. What’s impressive is that Robinhood still posted record revenue despite crypto falling 55% as rest of its business grew ~30% which shows just how much Robinhood has changed.”

Many called on investors to buy the dip. 

One user said, “$HOOD complete overreaction….Better get ready for a pop….”

Another user said, “$HOOD easy money here this will be back 95 soon probably next week.”

A third user said, “$HOOD looks like a buying opportunity to me.”

HOOD Stock: Q3 Results Snapshot 

Robinhood posted record third-quarter revenue of $1.42 billion, though it missed Wall Street estimates. The brokerage firm posted adjusted earnings of $0.60 a share. 

Robinhood's transaction-based revenue grew about 19% to $867 million, while prediction markets revenue jumped more than sixfold to $173 million and options revenue surged 31%. 

Rothera has emerged as a new business pillar for Robinhood, generating upwards of $100 million in annualized revenue.

“We want to give our customers the best prediction markets experience. We want them to have choices too. I do not think we can send all of our flow to one venue. We think that the combination of Rothera and Crypto.com positions us well to actually serve our customers well, have great execution quality, and have broad coverage of all of the assets that our customers want to trade,” CEO Vlad Tenev said in an earnings call with investors. 

However, crypto trading activity dipped 38% in transaction volume in the latest quarter. 

HOOD stock has plunged more than 18% year-to-date. 

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