Robinhood stock price has crashed: is it a good buy or sell?

Robinhood stock price crashed by over 6.5% on Tuesday as investors dumped technology companies, and the crypto market plunged. HOOD dropped to $107.50, down by 8.8% from its highest point this year. This article explores why Robinhood is a good buy today.

Robinhood business is thriving

Robinhood, a company that disrupted the financial industry, is doing well as demand for its services rose. It has become one of the most popular investing and trading applications in the US, and is quickly expanding in other markets. 

In addition to stocks, it has become a major player in the cryptocurrency market. Its main benefit is that it offers a unified platform where users can buy various assets without the need to use other platforms. 

Robinhood also expanded its solutions this week by launching a predictions marketplace for college football through a collaboration with Kalshi, one of the industry's largest players. 

Robinhood has also deepened its business in the crypto industry by launching tokenized stocks in Europe. This business makes it possible for its European customers to trade and invest in American stocks like Apple and Tesla. Eventually, it may use this approach to expand to other countries. 

Robinhood is also working on launching its layer-2 solution on Arbitrum, mirroring what Coinbase and Uniswap did. Coinbase launched Base, a layer-2 network that has become a market leader in its business. It handled almost $50 billion in volume in the last 30 days. 

Uniswap launched Unichain earlier this year, and DeFi Llama data shows that it handled transactions worth over $13 billion in the last 30 days. 

HOOD growth continuing

The most recent results showed that Robinhood’s business was growing. It funded customers jumped by 2.3 million YoY to over 26.5 million. 

Robinhood’s total platform assets surged from $140 billion in Q2’24 to $279 billion in Q2’25. Most importantly, the number of Robinhood Gold subscribers continued growing, reaching 3.48 million in the last quarter.

Analysts expect the company’s business to continue growing in the coming years. The average revenue estimate for the third quarter is $1.09 billion, up by 70.9% from the same period last year. The surge in revenue will partly be because of its Bitstamp acquisition, which closed in June. 

This growth trajectory explains why Robinhood has become an expensive company. It now trades at a whopping price-to-earnings multiple of 73%, much higher than other similar companies.

While this is a huge number, a closer look shows that it has a forward PEG ratio of 4.67, which is fair for a company whose sales growth is expected to be 20% in 2026. Robinhood has a long track record of beating analysts estimates. 

Also, Robinhood has a relatively strong rule of 40 multiple, which is calculated by adding its margins and revenue growth. In its case, when using the adjusted EBITDA margin, it has a rule of 40 figure of 112%.

Robinhood stock price analysis

The daily timeframe chart shows that the HOOD stock price peaked at $117.78 after publishing strong financial results. It remains significantly higher than the 50-day and 100-day Exponential Moving Averages (EMA). 

At the same time, the Relative Strength Index (RSI) and the MACD indicators have formed a bearish divergence pattern. The stock has also formed a bearish engulfing pattern, which often leads to a bearish breakdown. 

Therefore, the stock is likely to experience a short-term pullback and possibly retest the 100-day moving average at $81, before resuming its uptrend. A move above the all-time high of $117 will confirm the bull run.