Robinhood Hit by Back-to-Back Price Target Cuts as Q1 Metrics Disappoint

The Catalyst: Two Cuts in One Morning

Needham and Compass Point published price target reductions on HOOD within hours of each other on April 2, both reacting to Robinhood's March operating metrics released on March 30. Needham cut its target from $100 to $90, lowering estimates across equities, options, and net interest revenue while noting "slowed growth across the platform" in a "more muted environment." The new target implies a 27x multiple on Needham's discounted FY2027 EV/EBITDA estimate.

Compass Point's Ed Engel went further, dropping his target from $127 to $108 and modeling Q1 revenue at 9% below consensus with misses across all three business segments. Engel pointed out that "retail trading historically slows after five to six months of choppy markets" and noted most retail-favorite stocks have declined since early October.

Both firms maintained Buy ratings — which says something about how far the stock has already fallen. At $66, HOOD trades at roughly half the median analyst target of $117.58, and even the reduced targets imply 35-63% upside. The Street still likes the business long-term; they just don't like the next quarter.

Macro Made It Worse

HOOD didn't sell off in a vacuum. The S&P 500 fell 1.14% on April 2 after Trump used a prime-time address to signal more aggressive action against Iran, reversing the previous day's rally on ceasefire hopes. Brent crude jumped 8.2% past $109, and Nasdaq futures dropped 1.48% in the premarket.

High-beta retail names like HOOD tend to amplify broad index moves, and a stock already down 40%+ YTD with fresh negative catalysts is going to catch extra selling pressure on a risk-off day. The 50-day moving average sits at $80.09 and the 200-day at $110.44 — HOOD is trading well below both, deep in trend-follower sell territory.

The Q1 Earnings Setup

The irony is that just three days ago, on March 31, HOOD bounced 6% after those same March metrics showed equity and options volumes growing month-over-month. Equities notional volume came in at ~$196 billion (up from $194.4B in February), options contracts at 187 million (up from 180.3M), and event contracts at 2.6 billion (up from 2.4B).

But Needham and Compass Point looked at the same data and saw deceleration, not stabilization. Crypto notional volume dropped to roughly $16 billion from $25 billion in February — a 36% MoM decline extending a trend that's been the central bear case all year. Needham didn't even bother cutting crypto estimates because they'd already been slashed.

Q1 earnings land April 28. If Compass Point's 9%-below-consensus revenue model is in the right ballpark, that report could be ugly. On the other hand, expectations have been taken down aggressively at a stock price that's already discounting significant deterioration. The consensus EPS estimate of $1.35 for FY2026 has HOOD trading at roughly 49x earnings — still not cheap for a company with decelerating growth, but the $1.5 billion buyback provides some floor under the stock. The question is whether April 28 brings another leg down or becomes the capitulation event the bulls need.

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