Is Robinhood a Buy, Sell, or Hold in 2026?

Core Viewpoint - Robinhood's stock has surged over 200% in 2025 due to user base expansion and platform enhancements, but concerns exist regarding its ability to maintain this momentum in 2026 [1][2]. Financial Performance - Robinhood's revenue doubled to $1.3 billion in Q3, with non-GAAP earnings increasing by 259% to $0.61 per share [4]. - The average revenue per user rose by 82% to $191, and total users reached 26.8 million, a 10% increase year-over-year [4]. Market Context - The company's growth is significantly tied to the booming stock market, with the S&P 500 gaining 75% over the past three years and Bitcoin rising over 400% [5]. - Robinhood's revenue is heavily reliant on transactions from crypto investments and options trading, which are considered risky segments [6]. Economic Vulnerability - Robinhood has not yet faced a bear market since going public in 2021, raising concerns about its resilience during economic downturns [7]. - Current economic indicators show rising unemployment at 4.6% and a 22-year high in layoffs for October, suggesting potential economic slowdown [10]. Investment Outlook - Investors may consider holding onto Robinhood shares as long as the company continues to improve, but caution is advised due to potential declines if the U.S. economy slows [9]. - A significant market downturn could lead to a rapid sell-off of stocks, particularly among younger investors who have not experienced a bear market [11]. - It may be prudent for Robinhood investors to take profits soon rather than waiting for further gains in 2026, as the company has not demonstrated its ability to grow during prolonged market declines [12].