Should You Buy Robinhood Stock Before July 29?
Key Points
Robinhood stock plunged earlier this year as Bitcoin fell.
It has several near-term growth drivers in Trump accounts and the SpaceX IPO.
As the stock recovers, it has become expensive again.
Hot stock Robinhood Markets (NASDAQ: HOOD) hasn't been so hot for most of 2026. It's starting to recover, though, and it's roughly flat year to date.
The trading platform reports second-quarter earnings on July 29. Is now the time to buy?
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What to expect in the second-quarter report
Management doesn't provide a full quarterly outlook, but it does provide guidance around operating expenses, and it has planned expenses to "accelerate product velocity, drive net deposit growth, and grow revenues."
Robinhood has expanded into being much more than a stock trading platform. It also offers cryptocurrency and options trading, as well as several traditional banking products, such as a credit card. It also offers a premium membership program called Robinhood Gold, and it recently launched the prediction markets segment and the Robinhood Social social media app.
Image source: Getty Images.
It generates higher revenue when users trade on their accounts, and launching new products as well as attracting higher deposits should lead to increased revenue. What's been happening is that cryptocurrency, and specifically Bitcoin, is falling, and lower trading is negatively affecting Robinhood's growth.
Last year, cryptocurrency trading revenue increased 98% year over year in the second quarter, implying that this year, there will be either a major slowdown or a decline. In the 2026 first quarter, it declined 47%, which doesn't bode well for the second quarter. This might have already been factored into the stock, but now that the stock has recovered, it could drop again on bad news.
On the positive side, it has been setting up a new product to benefit from Trump accounts, which should be a positive impact on the business, and it was one of the platforms chosen for the Space Exploration Technologies (SpaceX) initial public offering, which could also add more revenue.
How will Robinhood stock react?
Robinhood may have a long growth runway as it disrupts traditional finance, but its growth minus cryptocurrency is somewhat underwhelming. Revenue increased 15% year over year in the first quarter. It added 1.7 million funded customers in the first quarter, a 6% year-over-year increase, for a total of 27.4 million. Robinhood Gold members increased by 1.2 million, or a 36% increase, to 4.3 million.
Since the stock is heading back up, it's becoming more expensive again. It trades at 37 times forward one-year earnings, which is rich, especially as revenue growth slows down.
Since there are reasons to suspect the pressure related to cryptocurrency has yet to abate, I wouldn't buy Robinhood stock before the report with the expectation that it will jump. I would only recommend buying it if you see the long-term vision and can hold through volatility.
Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.