Should You Buy Robinhood While It's Below $120?

Core Viewpoint - Robinhood has experienced significant growth, with its share price increasing by 1,100% over the past three years, but current market conditions may not be favorable for new investments in the company [1][2]. Business Performance - Robinhood's sales surged by 100% to $1.3 billion in the third quarter, with non-GAAP earnings rising by 259% to $0.61 per share [4]. - The user base has expanded to 26.8 million, a 10% increase year-over-year, and average revenue per user (ARPU) increased by 82% to $191 [5]. Revenue Sources - A significant portion of Robinhood's revenue, $730 million in the latest quarter, comes from transaction-based revenue, heavily influenced by a 300% increase in cryptocurrency trading [7]. - The company also sees growth from options trading, which is considered a riskier investment strategy [7]. Market Conditions - Robinhood's trading platform has only operated during a bull market, with the S&P 500 rising 50% since its IPO, suggesting potential vulnerability in a bear market [9]. - Recent economic indicators show a slowing job market, with October layoffs reaching a 22-year high, which could impact investor behavior and, consequently, Robinhood's performance [12].