Robinhood ($HOOD): From Meme Stock to Multi-Asset Platform?
Happy Easter Weekend 🐰 These long weekends off from the markets are nice reminders to take time away from the screens. Enjoy the other parts of life and what it has to offer and reset your brain.
In early 2021, Robinhood became the face of frustration during the GameStop (GME 0.00%↑) short squeeze. Trade restrictions, payment-for-order-flow revelations, and accusations of market manipulation tanked its brand credibility. Despite all this, the number of users have only increased.
And since then, Robinhood has seen a notable rebound—both in price action and in perceived legitimacy. But has it really outgrown its meme-era baggage, or is this just a more dressed-up version of the same story?
In today’s edition of The Dividend Journal, let’s talk about Robinhood’s:
Position in the market
The numbers
Potential future
With the current news of Trump tariffs, there is heightened fears of increased consumer prices and a potential global recession, impacting fintech firms reliant on consumer spending.
But despite market wide woes, analyst sentiment still remains relatively optimistic. Deutsche Bank highlighted Robinhood as a "good buying opportunity.” And, TipRanks consensus: $66.71 as the 12-mo target, which is a nice 62% increase from $HOOD’s stock price as of 4/17 close of $41.18/share.
Let’s discuss what Robinhood has to offer for the relatively optimistic views of its potential growth.
🏃Position in market
Robinhood’s Evolution
Robinhood has been actively reshaping its platform identity—evolving from a simple, no-commission trading app into a multi-asset, full-service financial platform. Over the past 12 months, several feature launches have quietly deepened its product moat:
24-Hour Market Access: Robinhood now offers 24/5 trading, allowing users to trade popular ETFs and select large-cap stocks around the clock M-F. This expands its appeal to active traders and global users seeking more flexible market access. This is still a relatively new aspect of the market with low volume across the board for all platforms that offer 24-hour market access.
Crypto Wallet & DeFi Access: The company launched a self-custody crypto wallet, allowing users to hold, swap, and send assets outside the Robinhood ecosystem. You’re also able to access Web3 tools without leaving the app. Note: you likely do not actually own the crypto as you don’t own the keys. Not your keys, not your coins!
Retirement Accounts: Robinhood introduced Roth and Traditional IRAs, with match incentives for contributions. This product appeals to the potential users that want to focus more on long-term wealth building instead of more active investors that focus on trading. You get 1%-2% match depending on whether or not you have Robinhood Gold.
Robinhood Gold Expansion: Gold now includes higher cash yields (thanks to elevated interest rates), advanced data tools (like Morningstar research), and expanded margin access.
Robinhood Legend: The advanced trading platform added advanced charting, options greeks, and trailing stops, appealing to more experienced traders while maintaining its clean interface for beginners. This also lowers the gap in terms of tools for active trading versus other more established brokerages.
These product expansions suggest a clear intent: Robinhood wants to graduate its users—from meme chasers into loyal platform users.
📏The Numbers
Look at this YoY comparison:
2023:
Transaction-Based Revenues: $1.2 billion
Net Interest Revenues: $500 million
Other Revenues (including Gold Subscriptions): $160 million
2024:
Transaction-Based Revenues: $1.8 billion
Net Interest Revenues: $929 million
Other Revenues (including Gold Subscriptions): $221 million
Q2 of FY 2023 was the first quarter where HOOD 0.00%↑ was profitable, with NI being $25 million. Since then, they have surged to a positive NI of $916 million Q4 FY 2024. I do have to note that this record profitability was benefited from a $369 million deferred tax benefit and $55 million in regulatory settlements. Nonetheless, if you factor these two variables out, the company went from an NI of $150 million in Q3 FY2024 to $492 million in Q4 FY 2024.
What does this mean?
67% of Q4 FY 2024 revenue was transaction based, meaning trading surged on the platform. 29% of the company’s revenue was from net interest, showing there is growing popularity in the platform’s margin lending.
There are two other metrics to know when looking at Robinhood: Monthly Active Users (MAU) and Average Revenue Per User (ARPU).
Despite being rocky with MAU & ARPU, it seems like the company has really seen a breakthrough to end their FY 2024. I believe this can be attributed to higher adoption of Robinhood Legend. It would also explain the surge in transaction based revenue as more active trading happens now on the Robinhood platform.
🔮The Future
The very fact that you can have Roth IRA and Traditional IRA accounts on the platform shows you that the company wants to stay in the game for the long run. Having these long term based accounts unlocks a higher LTV customer base and lower churn. You’re also able to invest into crypto and tap into real-money prediction markets, making it almost a one stop shop for all your needs.
The angle is also clear: the company is targeting the younger generation. With a more user friendly UI, access to crypto, market predictions, and active trading tools, Robinhood is positioned well to likely retain young customers for the rest of their lives.
There are a few caveats: crypto & prediction market regulations. A lot of these areas could face strict regulations that could impact the company’s offering. The company could also face user growth stagnation if they are unable to successfully expand their TAM. The company has already managed to tap into the European markets in early 2024 with commission-free stock trading in the UK. Continued expansion targets are: Canada, and Singapore in 2025.
The streets have given a conservative 10% CAGR over the next ten years. I think this growth rate is keeping expectations low hoping for a pleasant surprise. There are potential regulatory hurdles as well as approvals in other countries that the company needs to navigate, but Robinhood is positioned well to take advantage of their market position if they are able to continue to produce financial sticky relationships with their customers.