Should You Sell Your Robinhood Stock Now?
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Robinhood Markets (HOOD) stock lost 25.5% in the month to November 10, while the S&P 500 fell 3.6%. Shareholders now face a difficult decision, because the business remains highly profitable even as its sales growth slowed sharply in the third quarter. You can only evaluate that slowdown against the price you pay for the shares. So what are you paying for each dollar Robinhood earns?
Robinhood Stock Costs More Per Dollar Of Profit
Robinhood shares trade at 36.8 times the company’s profit over the last twelve months, compared with 22.3 times for the S&P 500. You pay far more for a dollar of Robinhood’s profit than for a dollar earned across the index.
A hypothetical scenario unrelated to Robinhood shows why this dynamic matters. A stock priced at forty times earnings falls to a multiple of twenty if its profit doubles and the share price does not move. The higher the multiple you pay, the more your return depends on profit growing from here.
How Fast Is Robinhood Still Growing?
Robinhood’s revenue grew 11.8% from a year earlier in the third quarter of 2026, slowing from 32.3% in the second quarter. The company said on October 27 that revenue reached a record $1.4 billion. Even so, the growth rate was the slowest of the last five quarters.
Profit is where Robinhood continues to stand apart. Over the twelve months to September, the company kept 45.7% of its revenue as operating profit, compared with 19.0% for the S&P 500. That margin may represent much of what buyers of the shares are paying for.
What Could Help Or Hurt Robinhood From Here?
The case for owning the shares is that customers keep bringing money in. Robinhood took in $16 billion of net deposits in the third quarter, the company said. On the October 27 call, management said it had already passed its annual goal of 20% net deposit growth, with two months left to go. October’s net deposits of over $13 billion included a $6 billion gift from the Dell family to Trump accounts, the company said. Management also said market share grew by double digits from a year earlier in each of its main product lines: equities, options, crypto and margin.
Higher spending poses a risk on the other side. Management said on the same call that Robinhood would ramp up investment in the community of builders around Robinhood Chain, which it launched on July 1. It also lowered the top end of its full-year outlook for adjusted operating expenses and stock-based compensation by $25 million. Increased spending while sales growth has slowed could narrow Robinhood’s operating margin, its clearest edge over the S&P 500.
Robinhood is expected to report its next quarterly results in February 2027, and its revenue growth from a year earlier is the number to watch. If growth picks up from the third quarter, the high price you pay per dollar of profit is easier to justify; if it slows further, that price is harder to defend.
Not Sure Robinhood Markets Is Worth It At This Price?
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