Robinhood (HOOD) hit an all-time high of $152.46 last year but has since fallen about 40% as investors question the sustainability of its growth. Third-quarter revenue rose 12% year over year to $1.4 billion, with options trading revenue up 31% to $399 million while crypto trading revenue fell 55%. The author argues that the high-risk, short-term trading behind options commissions may not last, noting that options revenue fell sharply in 2022 after surging in 2021, and the stock dropped 90%. The stock still trades at a price-to-sales ratio of 16.7, above its 12.3 average since going public in 2021, though rising interest rates could support net interest income. The author says they personally would not buy the stock now, given the risk of further downside relative to its valuation.
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