JPMorgan analyst Ken Worthington expects Robinhood’s crypto revenue to drop in Q1 2025 after a dramatic surge of 700% in Q4 2024. He has adjusted his price target from $45 to $44, maintaining a neutral rating as market sentiment weakens. Despite a recent uptick in retail buying, ongoing risks in margin trading could weigh heavily on Robinhood’s performance, with a forecasted decline in AUC and crypto trading volume.
Robinhood’s (HOOD) earnings report is on the horizon, and analysts from JPMorgan are predicting a decline in the company’s crypto revenue for Q1 2025. This follows an astonishing 700% surge seen in the previous quarter’s crypto trading revenue. The overall trading activity in the crypto market has been slowing down, raising concerns about whether Robinhood can replicate its previous success.
Analyst Ken Worthington at JPMorgan has lowered his year-end price target for Robinhood from $45 to $44. He maintains a neutral rating on the stock, highlighting the stark contrast between the impressive figures from Q4 and the expected downturn. The online trading platform is set to release its first-quarter results after the U.S. markets close on Wednesday.
The staggering crypto trading revenue increase in Q4 2024 was a major contributor to Robinhood’s overall transaction-based revenue growth. However, Worthington fears that this momentum could falter in Q1 2025 due to lagging performance in equity and crypto markets, especially towards the latter part of the quarter.
According to Worthington’s estimates, trading volumes on Robinhood plunged near $52 billion for the quarter, a steep drop from $71 billion in Q4. He cites a “risk-off” sentiment in the market, which has reversed most of the gains since the start of 2025. Furthermore, the assets under custody (AUC) at Robinhood are projected to decrease by 5% from the prior quarter to approximately $183.3 billion, though still showcasing a notable annual increase of 41%.
Despite some recent retail buying triggered by tariff-related updates from Washington, Worthington suggests that it might not be enough to boost the Q1 figures significantly. There’s also concern about weaker demand in margin and derivatives trading, a trend that’s also being observed with competitors like Interactive Brokers, potentially affecting Robinhood’s performance.
Valued at just under $49 currently, Worthington’s downgraded price target suggests a potential decline of about 10%. It’s a tense time for investors as they brace for the upcoming earnings report while hoping for positive signs amidst the market’s turbulence.
