Should You Forget Robinhood and Buy Webull Instead?
Key Points
Prediction markets have been a major catalyst for both companies.
Webull is adding users at a faster rate than Robinhood, while boosting its profit margins.
Webull has a more attractive forward P/E ratio than Robinhood.
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Robinhood (NASDAQ: HOOD) is soaring as investors bet that prediction markets will meaningfully strengthen the online brokerage's revenue growth. Its revenue increased by 32% year over year in the second quarter, and event contract sales were up by more than 10 -fold.
Prediction markets are already a large part of Robinhood's business, but investors may want to focus on Webull (NASDAQ: BULL) instead. Once a failed SPAC (special purpose acquisition company), Webull is gaining meaningful market share in the fintech industry, and investors should keep it on their radars.
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Webull is also riding the prediction markets wave
Prediction markets have been a boon for many fintech companies. Event contracts let people engage in peer-to-peer wagers about the outcomes in sports games and other events, including the weather, whether the Federal Reserve will hike rates, or which politician will win an election.
Webull recently expanded business-to-business (B2B) access to futures and prediction markets. Although futures are a nice bonus, prediction markets should turn into a major money-maker for the company, just as they have for Robinhood and other brokers. It's designed to attract more institutional investors, corporate partners, and accredited investors to the industry. Webull has offered prediction markets to retail investors since 2025.
Prediction market revenue can increase quickly. Robinhood debuted this business segment in March 2025 and expanded it to include National Football League and college football event contracts in August 2025. The latter contributed to parabolic revenue growth. In less than one year, prediction markets went from a minuscule slice of total revenue not worth mentioning to more than 10% of Robinhood's entire business.
Something similar can also happen for Webull. There is strong demand for prediction markets, and that activity can translate into more engagement for Webull's other businesses.
Webull is growing faster than Robinhood
Although Robinhood's 32% year-over-year revenue growth is impressive, it trails Webull's 51% growth rate, fueled by a 13% year-over-year increase in registered users. Meanwhile, Robinhood only reported a 7% year-over-year increase in funded customers. Webull delivered that top-line improvement as its net profit margin widened, with profit almost tripling year over year.
The company's strengthening financial position also made stock buybacks possible. Webull repurchased 1.8 million shares at an average purchase price of $6.03.
Both financial companies reported higher assets under management, but Webull once again emerged as the winner, with a 79% year-over-year increase compared to Robinhood's 32% year-over-year boost.
Webull has been expanding to more regions to accelerate growth. Spain, Argentina, and Colombia were recently given access to Webull. The company also continues to make strides in attracting institutional investors, with the total assets under management (AUM) from that group exceeding $1.4 billion.
Webull even has a better valuation
Robinhood gets more attention than Webull in the fintech landscape. Webull is the smaller of the two and is growing faster, but investors may be shocked to hear that Webull even has a better valuation.
It has a forward price-to-earnings (P/E) ratio of 23, compared to Robinhood's 38 forward P/E ratio. This metric assesses current profits and anticipates what they will look like within the next 12 months.
As Webull gains market share in the prediction market industry and continues to report excellent user engagement, its recent outperformance versus Robinhood should continue to expand. Robinhood shares are up by 9% this year, compared to Webull's 25% gain during the same stretch.
Webull stock doesn't receive as much attention, and that can present an attractive buying opportunity for long-term investors. Robinhood is performing well in multiple business categories, but Webull is doing a better job of gaining market share at this time.
Should you buy stock in Webull right now?
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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