Robinhood 's transactional revenues for the second quarter surpassed Wolfe Research's expectations, but activity linked to meme-inspired crypto dogecoin made up far more of that revenue than its analysts expected. "Robinhood's growth within crypto is nothing short of remarkable, but the outsized contribution from dogecoin simply cannot be ignored," Wolfe's Steven Chubak said in an investor note Wednesday. The firm lowered its price target on the newly publicly traded stock to $41 per share. Robinhood shares were down more than 9% on Thursday, trading around $45. Wolfe noted that dogecoin increased significantly as a percentage of revenue from 6% in the first quarter to 26% in the second quarter. Trading volumes for dogecoin have plummeted in the third quarter, however, by about 78% and are tracking below first-quarter levels. "We believe the 3Q slowdown could be much more acute than many investors were anticipating," he added. "This may not phase fintech investors with a longer investment horizon but may give financial investors more conviction in the short thesis." Dogecoin was created in 2013, and it's based on the internet meme doge from the same year. It resurged in popularity in 2021 among Reddit-trader types, with the encouragement of Tesla CEO Elon Musk. Unlike bitcoin and ether, it has little to show in terms of fundamentals.
A visual representation of digital cryptocurrencies Dogecoin and Bitcoin.
Yuriko Nakao | Getty Images News | Getty Images
Robinhood's transactional revenues for the second quarter surpassed Wolfe Research's expectations, but