Robinhood (HOOD) shares slumped 10% in early trading on Wednesday after fourth-quarter revenue missed estimates, with a decline in crypto trading impacting results.

The popular trading app reported fourth-quarter earnings per share of $0.66, beating expectations of $0.63. However, revenue came in at $1.28 billion, below the $1.33 billion analysts had forecast.

A downturn in crypto trading weighed heavily on results, with crypto revenue dropping 38% year over year to $221 million.

Wall Street bank JPMorgan cut its price target on Robinhood to $113 from $130 following the softer-than-expected fourth quarter, while maintaining a neutral rating and warning that tougher 2025 comps raise the bar for 2026.

That new price target still represents potential upside of more than 50% from the current price of $76.50.

Transaction revenue of $776 million fell short, driven by a drop in crypto revenue to $221 million amid a late-year slide in digital asset markets. Net interest revenue of $411 million also missed the bank's estimates, pressured by weaker securities lending and lower yields.

While January volumes have improved year over year, the bank's analysts, led by Kenneth Worthington, said growth is moderating across key metrics, prompting the bank to trim top-line forecasts and lower its price target.

Compass Point’s Ed Engel took a more constructive view, though also cutting his price target to $127 from $170 while reiterating a Buy rating. He noted that Robinhood’s January KPIs showed solid momentum across all segments — including better-than-feared crypto volumes — despite the weak fourth quarter. However, a 9% EBITDA miss, driven by lower securities lending and declining take rates in crypto and options trading, weighed on results.

The most surprising detail, Engel said, was Robinhood’s 2026 operating expense guidance of 18% growth. He expects spending to fund product expansion in areas such as crypto, DeFi, and prediction markets, which could pay off in the second half of 2026. Until then, however, investors may lower EBITDA expectations.

He pointed to internalization of prediction markets, a potential Trump-related user bump, and possible mega-IPOs from SpaceX, Anthropic or OpenAI as longer-term tailwinds.

He also flagged that Robinhood’s crypto take rate declined by 3 bps quarter-over-quarter in the fourth quarter and has fallen an additional 5 bps in so far in 2026 as higher-volume traders make up a larger share of the mix.

Engel: “In the near-term, we could see investors penalize HOOD for the higher spending, but sentiment could rebound by mid-2026 as investment ROIs begin to materialize."

Read more: Robinhood misses Q4 revenue estimates as fourth-quarter results dinged by crypto slump