Shares of financial services company Robinhood fell 14% in their worst week since August as investors withdrew from the surge that followed President Trump’s election. The stock is nearing a 14% weekly decline after dropping as much as 17%.
On February 12, the trading platform reported exceptional fourth-quarter earnings, with revenue more than doubling. This contributed to a remarkable 162% surge in its stock price from November 5, following Trump’s election, through the end of last week.
However, Citigroup Inc. and Wolfe Research LLC analysts noted that much of the company’s earnings growth potential was already reflected in the stock’s valuation. As a result, Wolfe’s Steven Chubak downgraded the stock from a buy rating to a hold-equivalent.
“We had recommended to our clients that they take some chips off the table at a $60 to $70 share price,” Chubak said. The downgrade is a wake-up call to investors to be “more forensic” over the company’s potential.
Crypto-fuelled growth after Trump’s elections spurred Robinhood stock
Robinhood experienced serious growth, more than 700% in crypto revenue during the fourth quarter. During the same period, Bitcoin traded above $100,000 as people speculated that Trump would support digital assets.
In an email, Mizuho analyst Dan Dolev explained that the pullback stemmed from concerns that the “animal spirits” driving the company’s strong fourth-quarter performance may not persist. However, he remains optimistic about the stock, citing ongoing tailwinds from digital assets and a growing user base on the trading platform.
Dolev isn’t the only one with a bullish outlook. Nearly three-quarters of analysts tracked by Bloomberg rate the stock as a buy, with an average 12-month price target of $70.76—slightly above its 2021 record high.
Still, Chubak cautioned that a rebound is not assured, pointing to industry data that indicates a decline in crypto activity so far this quarter.
Chubak said he would not be surprised if the stock continued declining in a weaker crypto activity environment.
Robinhood plans to expand to Singapore
According to a Bloomberg report, Robinhood plans to introduce cryptocurrency trading products in Singapore through its Bitstamp subsidiary.
While the online brokerage has not yet announced a launch date, it aims to begin rolling out services by late 2025. The report cited an interview with Johann Kerbrat, Robinhood Crypto’s vice president and general manager, highlighting Bitstamp’s existing licenses in Singapore as a key factor in the acquisition.
“Part of the reason why Bitstamp was attractive was because of their licenses with Singapore and its institutional business,” Kerbrat reportedly told Bloomberg.
Robinhood agreed to acquire Bitstamp in June last year for $200 million, a move intended to expand its reach among institutional crypto investors in the US and internationally. Bloomberg also noted that Bitstamp received in-principle approval from the Monetary Authority of Singapore last year. The acquisition is expected to close this year, pending regulatory approval.
