Should You Buy Robinhood Before Feb. 10?

Robinhood's (NASDAQ: HOOD) stock soared more than 70% over the past 12 months. The online brokerage impressed investors with its robust revenue growth, expanding margins, and rising profits, but should you chase that rally before its fourth quarter earnings report on Feb. 10?

How does Robinhood make money?

Over the past decade, Robinhood disrupted traditional brokerages with its commission-free trades, streamlined app, and gamified approach toward investing. It attracted millions of new retail investors during the buying frenzy in meme stocks and cryptocurrencies in 2020 and 2021.

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Its growth slowed in 2022 as rising interest rates drove investors toward more conservative investments. Still, it continued to expand over the following three years as interest rates cooled, it rolled out new features, and expanded its subscription-based Gold platform.

How fast is Robinhood growing?

From 2020 to 2024, Robinhood's annual revenue more than tripled, from $959 million to $2.95 billion, as its number of funded customers more than doubled from 12.5 million to 25.2 million. It also turned profitable by generally accepted accounting principles (GAAP) in 2024.

In the first nine months of 2025, Robinhood's revenue rose 65% year over year to $3.19 billion, and its GAAP net income increased 158% to $1.28 billion. That growth was driven by the organic expansion of its core business -- which reached 26.8 million funded customers at the end of the third quarter -- and by its acquisition of TradePMR last November. Its number of Gold subscribers -- who get access to interest-free margin, lower margin rates, higher interest rates on uninvested cash, and other perks -- increased 77% year over year to 3.9 million.

Should you invest in Robinhood before Feb. 10?

For the full year, analysts expect Robinhood's revenue and GAAP EPS to rise 53% and 30%, respectively. From 2025 to 2027, they expect the company's revenue and GAAP EPS to grow at CAGRs of 19% and 18%, respectively.

Its growth could gradually slow down as its business matures, and it might not seem like a bargain at 37 times this year's earnings. Yet with an enterprise value of $80.8 billion, it looks more reasonably valued at 23 times this year's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- which cuts through the noise from its acquisitions and stock-based compensation expenses.

Therefore, if you expect Robinhood to continue pulling retail investors away from traditional brokerages and locking them into its expanding ecosystem of banking and fintech services, then it might be smart to nibble on the stock before its upcoming earnings report.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.