HOOD · Robinhood Markets
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $103.99
Note written ·
Price against the kill line
25.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $103.99, on record since 11 November 2026. The shares are down 19.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $103.99, the 15 October 2026 close and just under the 50-day moving average, would show the shares leading the S&P 500 and prove this call wrong. So would fourth-quarter 2026 GAAP diluted EPS above the year-earlier level.
Research onlyNot in the portfolio.
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 28 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,424
- Revenue, change on a year (%)
- +11.8
- Net cash, cash less debt ($M)
- 3,169
- Price to earnings (×)
- 35.8
- Enterprise value to sales (×)
- 13.3
All filed numbers
What Robinhood Markets reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) |
|---|---|---|
| first filed | 1,424 | +11.8 |
| first filed | 1,308 | +32.3 |
| first filed | 1,067 | +15.1 |
| first filed | 1,283 | +26.5 |
| first filed | 1,274 | +100.0 |
| first filed | 989 | +45.0 |
| Pre-tax income ($M) | 625 |
| Net income ($M) four quarters: 1,984 | 468 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −0.8 |
| Operating cash flow ($M) | 3,046 |
| Capital spending ($M) | Not reported |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 5,829 |
| Debt ($M) non-current long-term debt | 2,660 |
| Net cash, cash less debt ($M) | 3,169 |
| Deferred revenue ($M) +40.4% on a year | 80.0 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) including non-controlling interests | 10,078 |
| Market value ($M) | 70,931 |
| Enterprise value, market value plus net debt ($M) | 67,762 |
| Enterprise value to sales (×) | 13.3 |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 35.8 |
| Price to book value (×) | 7.0 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.0% of shares outstanding sold short, 1.9 days of average trading to cover, −8.8% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $123.5M |
| 12 monthsfrom | $55.3M | $387.0M |
This note mentions Anthropic, the company that makes Claude, the AI model that wrote it. The same method and sources apply as on every note. The conflict of interest, stated.
The thesis
Robinhood Markets' event contracts are still growing. Its crypto, stock and options trading is shrinking or flat, and profit fell in the third quarter. The shares are more likely to lag the S&P 500 than lead it over the next three months. The November operating data, expected around 10 December 2026, and the fourth-quarter report expected in February 2027 settle it.
The company's October 2026 operating data, released after the close on 12 November 2026, confirmed the early press reports. Equity notional volume was $325 billion, up 1% from September and 2% from a year earlier. Options contracts were 289 million, flat on the month and up 8% on the year. Event contracts rose 5% on the month to 5.9 billion, up 136% on the year. Crypto notional volume fell 21% on the month and 48% on the year to $17.0 billion. Total platform assets fell 3% on the month to $383 billion.
The fight with the states continues. Robinhood sued Missouri's attorney general and state gaming officials on 9 November 2026 in the U.S. District Court for the Eastern District of Missouri. It wants a restraining order and injunctions against enforcement of state gambling law, according to Sports Betting Dime on 10 November 2026. No hearing date had been reported by 12 November 2026. In Ohio, the company agreed in October to stop offering new sports contracts.
The market already prices in a slowdown. The shares closed at $81.35 on 12 November 2026, 41.8% below the 52-week intraday high of $139.75. That puts them below both their 50-day and 200-day moving averages.
Bullish and bearish views on Robinhood Markets, Inc.
The bull case on Robinhood Markets, Inc. (HOOD), in brief: prediction markets keep compounding. The bear case: profit fell while revenue grew.
Bull case
- Prediction markets keep compounding. Event-contract revenue was $173 million in the third quarter of 2026, more than six times the year-earlier figure, on a record 16.4 billion contracts, per the 27 October 2026 release. October event contracts were 5.9 billion, up 136% year over year, per the company's 12 November 2026 release.
- Deposits and customers keep growing. October net deposits were $15.1 billion and trailing-twelve-month net deposits were $80.5 billion, per the 12 November 2026 release. Funded customers reached 28.9 million, up about 130,000 in the month.
- Margin lending keeps rising. The margin book reached $22.9 billion at the end of October 2026, up 4% on the month and 39% on the year, per the company's October data.
- Core brokerage revenue grew in the third quarter. Options revenue rose 31% to $399 million and equities revenue rose 41% to $121 million, per the 27 October 2026 release.
- Distribution is widening. An amended Anthropic registration statement named Robinhood as a retail distribution platform for the initial public offering (IPO), per company news on 5 November 2026. Robinhood launched IPO Access for UK customers on 9 November 2026.
- Analyst targets sit well above the price. Keefe, Bruyette & Woods raised its target to $115 from $105 on 10 November 2026. Cantor Fitzgerald kept $120 on 3 November 2026. Goldman Sachs's target is $128 and Truist's is $123, per reports from 28 October to 30 October 2026.
Bear case
- Profit fell while revenue grew. Third-quarter net income fell 14% to $476 million on revenue of $1.424 billion, up 12%. GAAP (reported) diluted earnings per share (EPS) fell 16% to $0.51, per the 27 October 2026 release.
- Adjusted earnings did not grow either. The amended 8-K filed on 27 October 2026 put third-quarter adjusted EPS at $0.60, against $0.61 a year earlier.
- Crypto is still shrinking. Crypto notional volume fell to $17.0 billion in October 2026. Activity in the Robinhood app fell 24% on the month to $6.8 billion, and Bitstamp fell 18% to $10.2 billion, per the 12 November 2026 release. Third-quarter crypto revenue fell 55% to $120 million.
- Stock and options trading has stalled. October equity volume rose 2% year over year and options contracts 8%, per the company's October data. Securities lending revenue fell 43% year over year to $34 million.
- State pressure is spreading. Robinhood Derivatives halted new Ohio sports contracts after a 2 October 2026 cease-and-desist letter. In a related Missouri case, the state's 9 November 2026 answer to Novig denied that sports event contracts are swaps under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), per DeFi Rate.
- Executives keep selling. SEC Form 4 filings show Chief Legal Officer Daniel Gallagher sold 10,000 shares at an average $85.05 on 3 November 2026. Chief Accounting Officer Dara Bazzano sold 4,473 at an average $85.32 on 2 November 2026, and co-founder Baiju Bhatt sold 50,912 at an average $101.40 on 21 October 2026. All three sales were under Rule 10b5-1 plans.
Price setup
The shares closed at $81.35 on 12 November 2026, down from $84.58 on 11 November 2026. That close came before the October data release at 4:05 p.m. ET. They have lost 14.9% over three months, measured from the $95.56 close on 14 August 2026. The lowest close of the post-earnings decline is $78.39, on 5 November 2026.
As of 12 November 2026, the price sits below both of its main averages: the 200-day at $91.53 and the 50-day at $104.19. The 52-week intraday high is $139.75, set on 9 December 2025. The 52-week closing low is $65.16, on 30 March 2026.
The 200-day average is the first level overhead. A recovery through it on November operating data would show the market giving more weight to event-contract growth than to the crypto decline. Rebounds on company news have not lasted so far. The shares rose on 9 November 2026, the day UK IPO Access launched, then closed lower at $81.33 the next day.
Catalysts ahead
- ~25 November 2026 (est.): Anthropic IPO, with Robinhood named as a retail distribution platform. Shows whether retail IPO access turns into disclosed customer participation and deposits; the final allocation and listing date are unconfirmed.
- ~10 December 2026 (est.): November 2026 operating data release. The first full month of event-contract volume after the Ohio halt and the Missouri suit, and a second reading on whether crypto and options volume keep falling or flat.
- ~31 December 2026 (est.): Expected Q4 2026 launch of Cboe company-metric binary options on Robinhood. A launch and early usage figures would show whether prediction markets can grow beyond sports and crypto.
- ~10 February 2027 (est.): Q4 2026 results. Shows whether revenue growth from event contracts and options finally lifts EPS above the year-earlier level.
What would change the view
A daily close above $103.99, the 15 October 2026 close and just under the 50-day moving average, would show the shares leading the S&P 500 and prove this call wrong. So would fourth-quarter 2026 GAAP diluted EPS above the year-earlier level.
What it trades with
The shares move with crypto. Benzinga tied the 5 November 2026 decline to bitcoin's fall after the midterm elections. The company also holds bitcoin on its own balance sheet after a $25 million purchase disclosed in October 2026. Coinbase and other bitcoin-linked stocks are the closest read-across. Prediction-market news also moves the shares. Kalshi, Crypto.com, Novig, Polymarket US and Underdog have all sued Missouri over the same state law, so rulings in these cases are likely to come close together and affect all of these companies at once.
The evidence, claim by claim (8)
- Q3 2026 revenue was $1.424 billion, up 12% year over year; GAAP diluted EPS was $0.51, down 16%; net income fell 14% to $476 million. Robinhood Q3 2026 results, 8-K Exhibit 99.1 · as of
- Q3 2026 event-contract revenue was $173 million, more than sixfold year over year, on a record 16.4 billion contracts traded; crypto revenue fell 55% to $120 million. Robinhood Q3 2026 results, 8-K Exhibit 99.1 · as of
- Amended Q3 2026 release shows adjusted EPS of $0.60 versus $0.61 a year earlier, after revising the tax presentation of non-GAAP adjustments; GAAP results unchanged. Robinhood 8-K/A, amended Exhibit 99.1 · as of
- October 2026: equity notional $325B (+1% MoM, +2% YoY), options 289M contracts (flat MoM, +8% YoY), event contracts 5.9B (+5% MoM, +136% YoY), crypto notional $17.0B (−21% MoM, −48% YoY). Robinhood October 2026 operating data release · as of
- October 2026: funded customers 28.9M, platform assets $383B (−3% MoM), net deposits $15.1B, margin book $22.9B (+39% YoY), securities lending revenue $34M (−43% YoY). Robinhood October 2026 operating data release · as of
- Robinhood sued Missouri's attorney general and state gaming officials in the Eastern District of Missouri, seeking a restraining order and injunctions against enforcement of state gambling law on its sports event contracts. Sports Betting Dime; Gambling Insider · as of
- Keefe, Bruyette & Woods raised its Robinhood price target to $115 from $105. Keefe, Bruyette & Woods, via fiscal.ai company news · as of
- Chief Legal Officer Daniel Gallagher sold 10,000 shares at an average $85.05 on 3 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 5 November 2026 · as of
Sources
- Robinhood reports 28.9M funded customers in October 2026 · investing.com ·
- Robinhood Markets, Inc. Reports October 2026 Operating Data · investors.robinhood.com
- Robinhood Markets, Inc. - Form 8-K - FY2026 · sec.gov
- Robinhood Markets, Inc. - Form 8-K/A - FY2026 · sec.gov
- Missouri Cease-and-Desist Leads to Robinhood Lawsuit · sportsbettingdime.com ·
- Missouri Prediction Market Fight Escalates as Robinhood, Polymarket Sue · gamblinginsider.com
- Three More Operators Sue Missouri as State Countersues Novig · defirate.com
- Robinhood Agrees to Halt New Ohio Sports Event Contracts · rg.org
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