Robinhood Markets Inc. (NASDAQ:HOOD) is down to $125 in premarket trading on Friday despite doubling revenue year-over-year and beating Wall Street's third-quarter expectations.
Strong Quarter Overshadowed By Leadership Uncertainty
The company on Thursday reported $1.27 billion in revenue, beating analyst expectations of $1.19 billion.
Meanwhile, net income surged to $556 million, or 61 cents per share, compared with $150 million and 17 cents last year.
Transaction-based revenue reached $730 million, slightly below the $739 million StreetAccount forecast.
Chief Financial Officer Jason Warnick said it was "another strong period of profitable growth" as Robinhood added Prediction Markets and Bitstamp divisions.
Each new line now generates over $100 million in annualized revenue.
The company guided full-year expenses to the top end of its range, hinting at margin pressure.
The CFO's plan to retire next year added to investor unease, fueling concerns over leadership continuity at a time when Robinhood is aggressively reshaping its business model.
Expanding Beyond Trading Toward Wealth Management
Robinhood continues to move beyond its retail trading roots, closing the gap with Coinbase Global Inc. (NASDAQ:COIN) through a push into full-scale wealth management.
The company now offers deposit-matching programs to attract clients from Fidelity and Charles Schwab.
Additionally, AUM has grown following the TradePMR acquisition.
Technical Levels Show Short-Term Weakness
HOOD Price Action (Source: TradingView)
Technically, HOOD's stock dropped sharply toward $127 after failing to hold support near the 20-day EMA.
The next major confluence zone sits between $124 and $120, aligning with the rising trendline support that has guided price action since May.
A decisive breakdown below $120 could expose the 100-day EMA near $115, while any rebound will face resistance at $130–$138, where the 20-day and 50-day EMAs converge.
Volume on the decline suggests firm selling rather than rotation, indicating that investors may be trimming exposure after the earnings catalyst.
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