Robinhood's (HOOD 3.67%) stock has declined more than 30% year to date. A single event didn't cause that pullback. Rather, it can be attributed to the cooling crypto market, slower retail trading, and concerns about its high valuations -- all of which drove investors to take some money off the table after its stock more than tripled in 2025.
Yet Robinhood's stock has still more than doubled from its 2021 IPO price of $38 per share. Let's review five reasons this fintech stock is worth buying as the bulls look the other way.
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1. Its customer base is expanding
Robinhood's commission-free trades and streamlined, gamified app pulled many younger retail investors away from traditional brokerages. From 2020 to 2025, its annual revenue more than quadrupled from $959 million to $4.5 billion, while its number of funded customers more than doubled from 12.5 million to 27.0 million.
Robinhood is also locking more customers into its Gold subscriptions, which provide interest-free margin, lower margin rates, higher interest rates on uninvested cash, and other perks for $5 a month or $50 annually. Its number of Gold subscribers grew 58% to 4.2 million in 2025, and that sticky ecosystem should widen its moat against other brokerages.
NASDAQ: HOOD
Key Data Points
2. Its fintech ecosystem is growing
Since its market debut, Robinhood has expanded its ecosystem with more crypto trading and staking, options trading, and card-based banking services. It also launched AI-powered portfolio management tools, wealth management services, and tokenized assets.
It's acquired nearly a dozen companies since its IPO -- including credit card company X1 Card, crypto exchanges WonderFi and Bitstamp, and wealth management platform TradePMR -- to support that expansion. Over the next few years, it will likely continue to acquire more companies to reduce its dependence on its core brokerage services.
3. Its regulatory headwinds are dissipating
Robinhood faced two major regulatory challenges in recent years: a potential crackdown on its "payment for order flow" (PFOF) business model, which subsidizes its free trades by selling its orders to high-frequency trading (HFT) firms; and harsher regulations for cryptocurrencies.
But under the Trump Administration, the Securities and Exchange Commission (SEC) withdrew its proposed restrictions on PFOF trades and adopted a friendlier stance toward cryptocurrencies. That's great news for Robinhood and other online exchanges.
4. Its profits are soaring
Robinhood turned profitable again by generally accepted accounting principles (GAAP) in 2024, and its EPS rose 31% in 2025. That growth was largely driven by higher interest rates, which boosted its net interest income (from uninvested customer cash, margin lending, and its brokerage sweep program), higher trading fees as the cryptocurrency market warmed up again, increased options trading, and the expansion of Robinhood Gold. It also streamlined its spending, pruned its workforce, and reduced its stock-based compensation expenses.
That stronger financial discipline, along with its ongoing growth in customers and assets, boosted its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins from 16% in 2020 to 56% in 2025. Its net margin also expanded from 1% to 42%.
5. Its valuations are attractive
From 2025 to 2028, analysts expect Robinhood's revenue and adjusted EBITDA to grow at CAGRs of 18% and 21%, respectively. That growth should be supported by the expansion of its WonderFi and Bitstamp platforms in a warming crypto market, its international growth across Canada and Europe, the rollout of institutional-grade derivatives trading tools, and the usage of more advanced AI algorithms to automate its services and improve its trading tools.
With an enterprise value of $72 billion, it still looks reasonably valued at 22 times this year's adjusted EBITDA. If it meets analysts' expectations and trades at a more generous 25 times its current-year adjusted EBITDA by the start of 2028, its stock could rise 56% over the next two years. That would easily outperform the S&P 500's average annual return of about 10%.
