If you trade in the stock market -- and certainly, most of the people reading this article fit that description -- you surely know what Robinhood Markets (HOOD +5.59%) does. Robinhood is perhaps the most disruptive financial services company of our time, bringing commission-free trading to the masses with its easy-to-use mobile app.
Robinhood is growing fast -- funded accounts are up 10% from a year ago, but the total platform assets exploded by 112%. Trading volume for equities, options, and cryptocurrency is all up from a year ago.
And the stock performance is everything investors could hope for, rising 413% in the last 12 months. An investment of $10,000 in Robinhood shares just one year ago would have left you with more than $50,000.
Robinhood is preparing for its third-quarter earnings report after the market closes on Nov. 5, and an earnings beat could propel the stock even higher. Is Robinhood a buy before earnings?
Let's find out.
Robinhood's tailwinds
First, let's acknowledge there's a lot to like about Robinhood right now. The company currently has 26.7 million funded accounts and $304 billion in total platform assets in which customers can trade stocks, equities, and cryptocurrencies.
The increase in traffic has been eye popping during the past year. Trading volume for both equities and cryptocurrencies rose more than 100% on a year-over-year basis, while options contracts jumped by 33%.
|
Metric |
August 2024 |
August 2025 |
Year-Over-Year Growth |
|---|---|---|---|
|
Equities |
$96 billion |
$199.2 billion |
107% |
|
Options |
$147 million |
$196 million |
33% |
|
Cryptocurrencies |
$5.4 billion |
$13.7 billion |
154% |
|
Total Platform Assets |
$144 billion |
$303.9 billion |
112% |
Source: Robinhood August 2025 metrics
Management said that the average asset-per-funded customer topped $10,000 in the second quarter -- the first time in the company's history that it achieved that level.
Second-quarter revenue topped $989 million, up 45% from a year ago, and net income rose 105% to $386 million. Significantly, the average revenue per user jumped 34% to $151, management said.
While trading volume for Robinhood's core products is up, there are also two other trading opportunities that are driving Robinhood stock.
The first is asset tokenization. Robinhood started its tokenization program in June, making more than 200 stocks available to customers in the European Union. Tokenization works on the blockchain as assets such as stocks are converted into tradeable digital tokens. Robinhood has referred to tokenization as a "freight train" that will drive profits. I expect investors will hear more about it and Robinhood's plans for Europe when it reports earnings.
NASDAQ: HOOD
Key Data Points
The second is prediction markets, which Robinhood launched in March. Prediction markets let users bet on what they think will happen in future events, including sports, financial news (like Federal Reserve actions), and popular culture. Robinhood charges a commission of $0.01 per contract. Chief Financial Officer Jason Warnick said in the company's Q2 analyst call that Robinhood saw nearly 100 million contracts in Q2, so the company earned roughly $1 million on those trades.
Robinhood said trading volume on those bets was close to $1 billion.
Robinhood expanded its prediction markets in August with a partnership with Kalshi, which lets it offer trades on the outcomes of college and professional football games and avoid gambling laws. Kalshi is regulated by the Commodities Futures Trading Commission and operates on the blockchain.
Image source: Getty Images.
The bottom line on Robinhood stock
It's never a sure thing when a company steps up to the podium for its earnings report -- and an earnings miss or weaker-than-expected company forecast could hurt any stock.
But the momentum is firmly with Robinhood, as is its recent earnings history. In fact, for the last three quarters, Robinhood has beaten analysts' expectations, often by a wide margin, in earnings per share (EPS).
|
Period |
EPS Estimate |
EPS Actual |
Surprise % |
|---|---|---|---|
|
Q4 2024 |
$0.45 |
$1.01 |
126.4% |
|
Q1 2025 |
$0.33 |
$0.37 |
13.5% |
|
Q2 2025 |
$0.31 |
$0.42 |
36% |
Analysts have an average estimate of $0.52 EPS for the Q3, with that number steadily climbing during the past 90 days. And while that's a big number, it's not out of the question particularly as Robinhood has seen huge increases in trading volume and platform assets over the last year.
The tokenization effort and the predictive markets program are welcome new businesses for Robinhood, which also has its Robinhood premium Gold membership platform (for a fee) and plans to roll out additional wealth management services, including Robinhood Banking.
For me, Robinhood stock is a buy before earnings. I see this stock reaching new highs before the end of the year.
