Should You Buy Robinhood Markets Stock While It's Below $125?

Robinhood Markets (NASDAQ: HOOD) has arguably been one of the more disruptive names in the stock market during the past several years. Robinhood's innovative platform, which lets investors buy and sell stocks and trade options, popularized the trading of fractional shares and made commission-free trading mainstream.

Robinhood's platform gained a lot of popularity during the COVID-19 pandemic's height, and it has been a popular stock to trade since it went public the following year. This year was its best-ever year in the stock market, as shares hit an all-time high of $153.86.

Robinhood is continuing to evolve, allowing cryptocurrency trading, incorporating artificial intelligence, and expanding into prediction markets. However, the stock has faltered in the last several weeks as it faces increasing competition and a generalized weakness in cryptocurrency prices.

Now trading 24% off its all-time highs, Robinhood shares are on sale and due for an inevitable rebound. Should you jump on Robinhood stock while it is still below $125?

About Robinhood Markets

Robinhood Markets is a popular trading platform for stocks, exchange-traded funds, cryptocurrencies, and options. The company played a major role in making stock trading accessible -- and enjoyable -- for retail investors. It operates a mobile-first app that makes trading simple, and it includes a vibrant community platform that lets users share information, talk about their trades, and see other users' performance.

Because Robinhood offers commission-free trades, it makes its money through payment for order flow (PFOF), in which market makers pay Robinhood for the right to execute user trades. Robinhood also makes money from interest on customer cash and margin loans, and from its premium Robinhood Gold service.

Revenue in the third quarter was $1.28 billion, up 11% from a year ago. Robinhood saw a 129% increase in transaction-based revenue and a 100% increase in revenue from Robinhood Gold subscribers.

The company has 26.9 million funded customers, with total platform assets of $325 billion. While those numbers are up significantly from a year ago, they also show a slowdown on a sequential basis.

Data source: Robinhood Markets.

Interestingly, cryptocurrency trading is down by a wide margin this year, reflecting the sagging crypto market. When cryptocurrency prices rebound, I expect those numbers to recover as well.

Robinhood keeps evolving

I don't like companies that stand pat. One of the things I like best about Robinhood is that it continually adds features and evolves -- and that's one of the primary reasons the stock price has increased by 215% in 2025.

Robinhood launched its asset tokenization program in June for the European Union, which made stocks available for trading in European countries. Tokenization works on the blockchain, converting stock ownership into tradable digital tokens. Robinhood launched the effort with 200 available stocks, and then increased that to more than 400 stocks by the end of Q3.

Chief Executive Officer Vladimir Tenev told analysts that the company plans to make tokenized equities available on secondary trading on Bitstamp, "and then eventually them being on DeFi the possibilities really start to multiply. You start thinking about self-custody, collateralized lending and borrowing, which we think could be very, very disruptive as well."

Robinhood is also going full-throttle into prediction markets, which allow users to bet on the outcomes of future events, such as politics, sporting events, or things like Federal Reserve actions. There are currently more than 2,100 events available on Robinhood's app for users to place prediction bets, ranging from who will be the college football champion to the number of confirmed measles cases.

"Prediction markets are really on fire," Tenev said. "It's hard to believe that we launched this just about a year ago with the presidential election markets. We've doubled volume every quarter since then to 2.3 billion contracts in Q3. And the month of October alone was up to 2.5 billion contracts."

Image source: Getty Images.

Should you buy Robinhood stock below $125?

I can see why Robinhood pulled back in recent weeks. Any time a stock gains by more than 200% in a year, concerns arise that it may be overvalued. The decrease in cryptocurrency prices is also an issue. It's not a coincidence that Robinhood's stock has fallen along with Bitcoin and Ethereum during the past three months.

HOOD data by YCharts.

But Robinhood is on the cusp of some amazing gains. Analysts expect revenue to rise by nearly $1 billion, to $5.43 billion.

Analysts are getting increasingly bullish on their price targets. Of the five analysts that issued updated price targets in the last two months, all of them are over $145, representing at least 24% gains in the coming months.

Data source: Yahoo! Finance.

It's never a good idea to time the market, so if you're waiting for a bottom in Robinhood Markets' stock, don't. For long-term investors, Robinhood looks like a strong buy right now, and investors would be wise to jump in before the stock crosses the $125 mark again.

Patrick Sanders has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.