Why Robinhood Stock Dropped 11% in the first half of 2026

Robinhood Markets (NASDAQ: HOOD) stock fell 11% in the first half of the year, according to data provided by S&P Global Market Intelligence. It had been following the trajectory of Bitcoin, which was plunging, but it has started to climb back up.

More than cryptocurrency

Robinhood is still a fairly small company, with $4.6 billion in trailing 12-month revenue, but it has already had a major impact on the markets. It introduced the fee-free trade, which is now standard for trading platforms, and it has been following that up with many fintech innovations.

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That hasn't been entirely positive for the company. Although it was reporting high growth, much of it was coming from cryptocurrency trading. The Bitcoin drop led to a contraction in growth. Some of its other innovations, like its Prediction Markets segment, are risky.

On the plus side, it was one of the trading platforms chosen for retail investor access to the Space Exploration Technologies (SpaceX) initial public offering (IPO), and it was recently approved to underwrite IPOs as well.

It's also introducing many traditional services in its bid to become a major financial player, including credit cards and bank accounts. These services provide stability and minimize the risk of other types of products.

With cryptocurrency trading falling, revenue growth has been mediocre. Revenue increased 15% year over year in the 2026 first quarter, a huge slowdown from 50% last year. This included a 47% decrease in cryptocurrency trading revenue and 46% increase in equities trading revenue.

There were many positives in the quarter, though, including a 39% increase in platform assets and a 36% increase in Robinhood Gold subscribers, its membership program, for a total of 4.3 million. It added half a million funded accounts, and Robinhood banking grew fivefold sequentially.

Priced to buy?

The 11% decrease in the first half of the year obscures the recent climb -- Robinhood stock is up 45% over the past three months. Investors are impressed with the company's new capabilities and future opportunities.

It also became much cheaper at the lower price. Robinhood stock had been priced for perfection, which made it susceptible to falling under pressure, and that's what happened.

It now trades at a P/E ratio of 55 and a price-to-sales ratio of 22, so it may be returning to premium levels. Risk-tolerant investors who have a long-term horizon might want to take a small position at this price, but as it gets more expensive, it gets back to becoming susceptible to another fall.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.