Robinhood Markets HOOD is scheduled to report second-quarter 2026 results on Wednesday after market close.
After an impressive 2025 performance, momentum continued for HOOD in the first quarter of 2026 amid crypto weakness. Solid trading activity across options and equities amid heightened volatility led to an increase in transaction-based revenues, while a sell-off in cryptos hampered performance to some extent. Further, higher net interest revenues (NIR) and a surge in Gold subscribers were tailwinds.
Hence, the company’s top line grew 15% year over year. HOOD is expected to have witnessed solid revenue growth in the second quarter as well. The Zacks Consensus Estimate for sales of $1.22 billion suggests a 23.6% surge on a year-over-year basis.
Robinhood has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with the average beat being 13.71%.
Earnings Surprise
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In the past week, the consensus estimate for earnings has remained unchanged at 39 cents. This indicates a fall of 7.1% from the prior-year quarter.
HOOD’s Earnings Estimates
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With Robinhood’s latest earnings release approaching, should investors buy the stock now or wait until after the results are announced? Let’s examine how the company is positioned ahead of earnings.
Factors to Note & Estimates for HOOD’s Q2 Results
Revenues: During the second quarter, client activity was robust, driven by heightened volatility. Hence, Robinhood’s transaction revenues are expected to have increased like its peers, Interactive Brokers Group IBKR and Charles Schwab SCHW.
Interactive Brokers, which released second-quarter results on July 21, witnessed a 30% year-over-year rise in commissions. Schwab, which also announced quarterly numbers on July 21, recorded 28% growth in trading revenues.
The Zacks Consensus Estimate for HOOD’s transaction-based revenues is pegged at $723.6 million, indicating a 34.2% increase from the prior-year quarter. This performance is likely to have been supported by higher options and equity transaction revenues, along with strong growth in the prediction markets business. However, cryptocurrencies transaction revenues may have remained subdued due to continued weakness in the underlying digital assets during the quarter.
The consensus estimate for options transaction revenues is $333.6 million, suggesting 25.9% growth. Further, the Zacks Consensus Estimate for equity and cryptocurrencies transaction revenues is pegged at $125.2 million and $83.5 million, respectively. Equity transaction revenues are projected to soar 89.8%, while cryptocurrencies transaction revenues are estimated to plunge 47.8% year over year. The consensus estimate for other transaction revenues of $171 million suggests a substantial surge from $48 million in the prior-year quarter.
Robinhood’s NIR is expected to have witnessed a decent rise on the back of higher interest-earning assets and securities lending activity. The consensus estimate for the metric is $371.9 million, implying a 4.2% rise.
The Zacks Consensus Estimate for other revenues is pegged at $145.4 million, suggesting a 75.2% jump from the prior-year quarter.
Expenses: Total operating expenses are likely to have remained elevated as HOOD invests in key areas to enhance platform capabilities, drive product innovation, improve customer support and build upon regulatory and compliance functions. Further, expansion through global presence is likely to have added to expenses.
Additionally, as the company trims around 10% of its workforce, it is expected to incur restructuring charges of $28 million in the second quarter, primarily related to severance payments, employee benefits and stock-based compensation.
What Our Model Unveils for Robinhood
Our quantitative model shows that the chances of an earnings beat for Robinhood are high this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you see below.
Earnings ESP: Robinhood has an Earnings ESP of +2.98%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: It carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HOOD Stock Price Performance & Valuation
Robinhood shares had a weak start to 2026. However, the trend reversed in the second quarter as investor confidence improved, supported by the company’s efforts to diversify beyond trading through the launch of several new products and services.
In the second quarter, HOOD jumped 44.7%, outperforming the industry’s growth of 15%. Also, it fared better than Schwab and Interactive Brokers.
HOOD’s Q2 2026 Price Performance
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Now, let’s look at the value Robinhood offers investors at current levels.
Currently, HOOD is trading at 9.56X 12-month trailing price/tangible book (P/TB), above the industry’s P/TB TTM multiple of 3.40X. Hence, the stock is trading at a steep premium compared with the industry.
HOOD P/TB TTM
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Robinhood stock is expensive compared with Interactive Brokers and Schwab. At present, Interactive Brokers and Schwab have a P/TB TTM of 1.86X and 7.79X, respectively.
Investment Thesis for Robinhood
Robinhood is making tangible progress in broadening its business mix and deepening its product ecosystem. The company’s strategy of launching new offerings and pursuing international expansion supports its long-term ambition to build a more diversified global platform.
HOOD’s expanding suite of products continues to resonate with a younger, digitally native customer base, while the gradual shift away from transaction-driven revenue underscores improving business maturity. Strong liquidity, a $1.5 billion share repurchase program, a $2 billion debt issuance and healthy user growth amid broader digital asset adoption further strengthen the constructive view.
Robinhood continues to face increasing regulatory scrutiny, fines and investigations across multiple jurisdictions, which could elevate compliance costs and complicate its expansion strategy. In addition, its push into banking introduces execution risk, particularly in an intensely competitive environment, which may keep investors measured on the pace and magnitude of success.
Robinhood appears well-positioned to scale and diversify its operations. Given the persistent macroeconomic uncertainty and elevated market volatility, the company will likely benefit from stronger trading activity. However, weakness in cryptocurrency markets may remain a headwind to financial performance.
Yet, the company is continuing to invest in its crypto business through tokenization initiatives, platform enhancements, acquisitions and expansion in Europe. However, recent volatility in digital assets has pressured sentiment and trading engagement, as reflected in a steady decline in crypto Daily Average Revenue Trades. While Robinhood is working to reposition itself as more than a crypto-driven platform, that transition is likely to take time.
To Buy or Not to Buy Robinhood Shares Ahead of Q2 Earnings?
Although Robinhood’s second-quarter revenues are expected to increase, the overall setup appears unfavorable amid rising cost pressures, subdued cryptocurrency activity and a premium valuation.
Cryptocurrency transaction revenues are likely to decline, reflecting weaker retail participation and volatility in digital asset prices. At the same time, operating expenses are expected to remain elevated, while restructuring, merger-related and other deal costs could further pressure margins.
HOOD stock also appears expensive at current levels. Investors may be better off waiting for the second-quarter results and management’s commentary on the performance and adoption of its newly launched products and services before making an investment decision. Existing shareholders may hold the stock, but fresh positions seem unwarranted ahead of the earnings release.
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This article originally published on Zacks Investment Research (zacks.com).