58% Upside Potential Despite Earnings Shock: Why Bernstein is Betting on Robinhood

On April 28, 2026, Robinhood Markets' first-quarter results shocked the market as both revenue and earnings fell below Wall Street expectations. This caused the stock to drop about 7%, sliding to the $82 level, but not all analysts are offering a pessimistic outlook.

Bernstein analyst Gautam Chhugani assessed that this earnings miss was already priced in, maintaining an 'Outperform' rating and a $130 price target. This is a bold figure suggesting approximately 58% upside from the current price.

While Robinhood is suffering from the double whammy of declining crypto trading volume and macroeconomic uncertainty, Bernstein is focusing on the company's evolution from a simple trading platform into a comprehensive financial ecosystem. In particular, the acquisition of Bitstamp and the growth of margin trading are cited as key factors that will drive long-term corporate value.

Behind Bernstein's strong confidence in Robinhood despite the cold market reaction lies a conviction in retail investors' asset migration and service diversification. This is interpreted as a strategic judgment focusing on changes in the company's fundamentals rather than short-term earnings weakness.

Robinhood's earnings per share (EPS) for the first quarter of 2026 were recorded at $0.38, significantly missing the market consensus of $0.50. Revenue also failed to reach the expected $1.24 billion, recording $1.07 billion, a 17% decrease year-over-year. This poor performance is analyzed as a result of slowing trading activity combined with increased marketing costs.

Robinhood is undergoing a structural evolution centered on crypto and margin trading, and the market is underestimating the company's long-term growth drivers.

Bernstein noted that this quarter's weakness is a temporary phenomenon and that Robinhood is emerging as a powerhouse in crypto and margin trading beyond simple retail brokerage. In particular, it predicted that global expansion through the acquisition of Bitstamp and the strengthening of institutional-grade services would be key to improving future profitability. Analyst Chhugani views the current stock price decline as a buying opportunity.

Crypto Sector Headwinds and Bitstamp's Buffering Role

First-quarter crypto-related revenue plummeted 47% year-over-year to $134 million, and crypto trading volume within the Robinhood app decreased 48% to $24 billion. However, the $42 billion in trading volume contributed by Bitstamp brought the total volume to $66 billion, proving the strategic value of the merger and acquisition. This shows that Robinhood is compensating for the volatility of its own app through the acquisition of external platforms.

• Achieved a record high of 8.8 billion event contract trades
• Maintaining and monetizing a margin book worth $17 billion
• Robinhood Retirement Assets Under Custody (AUC) surged 90% year-over-year

Contrary to Bernstein's optimism, major financial institutions lowered their price targets in unison, showing a cautious stance. Barclays lowered its target from $124 to $89, Goldman Sachs from $102 to $91, and JPMorgan from $113 to $92, expressing concern over short-term profitability deterioration. This split among analysts clearly reveals the market's conflicting views on Robinhood's future value.

CEO Vlad Tenev mentioned the 'Great Wealth Transfer' during this earnings announcement, emphasizing that while investments for marketing and growth increased operating expenses by 18%, it was an essential choice for the future. With Robinhood down 53% from its 52-week high, market attention is focused on whether Bernstein's $130 target can be realized. In particular, the recovery of trading volume during the remainder of 2026 is expected to be the key to the stock's direction.