robinhood (HOOD) shares fell more than 12% in early trading Wednesday after the trading platform’s revenue fell short of expectations the day before.

Robinhood reported record revenue of $4.5 billion by 2025, including a record $1.28 billion in the fourth quarter. However, his fourth quarter earnings came in short of the $1.35 billion expected by the Street.

Crypto revenue in the fourth quarter was $221 million, below estimates of $248.2 million. Options revenue also fell short of expectations, at $314 million versus estimates of $331 million.

“A top-line miss is not helpful at all,” Christian Bolou, an analyst at Autonomous Research, told Yahoo Finance.

“Net deposit growth slowed in the fourth quarter and appears to have slowed in January,” he added. “The stock’s reaction could be justified here given the high expectations and a very expensive stock.”

At press time, the stock was down 40% from its all-time high.

However, analysts were bullish on Robinhood, expecting the company’s various businesses, including app offerings and prediction markets, to balance out. a cryptographic winter in which bitcoin has fallen more than 45% since its all-time high in October.

“It’s much more diversified than in previous periods and, just from a business perspective, it’s better managed,” added Bolou, whose firm has a buy rating on the stock and a $128 price target. “All of these things set the company up nicely for a crypto winter.”

Robinhood has aggressively diversified away from crypto and stock trading to generate revenue from other streams, including its subscription service, banking and wealth management.

Analysts at Compass Point said they “expect Robinhood’s accelerated product roadmap to benefit revenue” in the second half of 2026.

On Wednesday morning, the company maintained a buy rating on the stock but lowered its price target from $150 to $127.

Ines Ferre is a senior business reporter at Yahoo Finance. Follow her to X a @ines_ferre.

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