Robinhood (HOOD +3.37%), which was founded in 2013, disrupted the online brokerage market with its commission-free trades and gamified approach to investing. It became a household name during the pandemic as a mix of low interest rates, stimulus checks, and social media buzz drove a new generation of retail investors to its app.
Robinhood went public at $38 per share in 2021. Its stock went through some wild swings over the next four years, but it now trades at about $114. Let's see why this divisive brokerage impressed the market -- and where it might be headed over the next 10 years.
Image source: Getty Images.
What happened to Robinhood over the past few years?
Robinhood can offer fee-free trades because it bundles together all of its orders and sells them to high-frequency trading (HFT) firms which squeeze out slim profits from those bulk trades. Many other online brokerages -- including Morgan Stanley's E*Trade -- now use that same business model to subsidize their commission-free trades.
NASDAQ: HOOD
Key Data Points
Robinhood also simplified the investing process with a streamlined mobile app which more closely resembled a mobile game than a brokerage platform. That strategy was controversial because it arguably targeted younger and less experienced investors, but it turned Robinhood into a top trading platform during the aforementioned buying frenzy in meme stocks, speculative options, and cryptocurrencies in 2020 and 2021.
In 2022, those temporary tailwinds dissipated as rising interest rates drove investors to halt their aggressive trades and pivot toward more conservative investments. That's why it barely gained any new funded customers that year as its assets under custody and revenue declined:
|
Metric |
2020 |
2021 |
2022 |
2023 |
2024 |
|---|---|---|---|---|---|
|
Funded customers |
12.5M |
22.7M |
23.0M |
23.4M |
25.2M |
|
Assets under custody |
$63B |
$98B |
$62B |
$103B |
$193B |
|
Revenue growth |
245% |
89% |
(25%) |
37% |
58% |
But in 2023 and 2024, Robinhood's growth accelerated again. That growth was driven by lower rates, which drove more investors back toward riskier investments, and the expansion of its ecosystem with fresh features. Its Gold subscription tier -- which provides $1,000 of interest-free margin, lower margin rates, higher yields on uninvested cash, bonuses on taxable deposits and IRA contributions, higher limits for instant deposits, access to Level II trading data, and other perks -- also continued to expand.
What will happen to Robinhood over the next decade?
In the first nine months of 2025, Robinhood's revenue doubled year over year to $1.27 billion. That explosive growth was fueled by the warming market and its acquisition of TradePMR last November. At the end of the third quarter, its total platform assets (which merges its assets under custody with the new assets it gained from TradePMR) surged 119% year over year to $333 billion, its funded customers rose 10% year over year to 26.8 million, and its number of Gold subscribers jumped 77% to 3.9 million.
For the full year, analysts expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to rise 53% and 76%, respectively. From 2025 to 2027, analysts expect its revenue and adjusted EBITDA to grow at a CAGR of 16% and 22%, respectively. So while it's still growing, it's gradually maturing as it saturates its core market of younger retail investors. With an enterprise value of $117.4 billion, it also can't be considered a bargain at 36 times next year's adjusted EBITDA.
Over the next decade, Robinhood could evolve into a full-fledged fintech platform with more traditional banking, wealth management, and AI-powered investment services. It's also been "tokenizing" more U.S. Treasuries, stocks, exchange-traded funds (ETFs), and even special purpose vehicle investments in private start-ups on its blockchain. Those tokenized assets could be traded faster for lower fees than the underlying investments. It will also likely pursue additional acquisitions to gain more customers and assets.
According to Grand View Research, the online trading platform market could grow at a CAGR of 7.3% from 2024 to 2030 as the fintech-as-a-service market expands at a faster CAGR of 17.5% from 2023 to 2030. So while Robinhood's core markets are maturing, it could still have room to grow as it pulls more customers away from traditional banks and brokerages. However, it could still face plenty of competition from diversified fintech competitors like SoFi.
Where will Robinhood's stock be in 10 years?
Assuming Robinhood matches analysts' estimates through 2027, grows its adjusted EBITDA at a CAGR of 20% through 2035, and trades at 30 times its current year's adjusted EBITDA by the final year, its stock price could more than quadruple over the next decade. That would be an impressive 10-year gain, but it might not be the millionaire-making gain that some investors are expecting.
Robinhood established a first-mover advantage in its gamified niche of the online trading market, but investors should maintain realistic expectations and expect its growth to slow down as it expands and evolves into a more diversified fintech company.
