‘We See A Number Of Reasons To Be Positive’

Robinhood Analysts ‘Pleasantly Surprised’ by Crypto Volume at the Start of Q2: ‘We See Plenty of Reasons to Be Positive’

Stock and cryptocurrency trading platform company Robinhood Markets Inc (NASDAQ:HOOD) announced its first-quarter financial results after the market close on Wednesday.

Analysts react to the company’s future with revenue and earnings per share.

Robinhood Analysts: Piper Sandler analyst Patrick Moley has a Neutral rating and raises his price target to $18 from $17.

KeyBanc analyst Alex Markgrafff has an Overweight rating and a $23 price target.

Goldman Sachs analyst Will Nance has a Neutral rating and a $20 price target.

Needham analyst John Todaro has a Hold rating and no price target.

JPMorgan analyst Kenneth Worthington has an Underweight rating and raises his price target to $16 from $12.

Mizuho analyst Dan Dolev has a Buy rating and raises his price target to $23 from $21.

JMP Securities analyst Devin Ryan has a Market Outperform rating and raises his price target to $30 from $28.

Related Link: SEC Led by Gary Gensler Source of Frustration for Robinhood, CEO Vlad Tenev Says They Had 16 Meetings on Wells Report

Piper Sandler: Moley said stronger-than-expected transaction revenues helped beat first-quarter estimates.

The analyst points to the strong early results Robinhood shared in April.

“In April, HOOD said net deposits were a record monthly $5 billion,” Moley said.

Robinhood shares are likely trading higher due to the first-quarter rally and strong trends in April, Moley said.

KeyBanc: Markgraff said the asset trading company experienced “a lot of good things” in the first quarter.

“We are raising our FY24 revenue forecast mostly due to better transaction revenue, with a large portion of that coming down to EBITDA,” Markgraff said.

Robinhood saw strong net deposit growth in the quarter, the analyst said.

“We don’t expect the journey to be linear, but we believe Robinhood is poised to continue its FinApp leadership and grow ARPU.”

Goldman Sachs: Nance said retail trading in the first quarter helped the company beat analysts’ estimates.

“We expect stocks to react positively following outstanding results that significantly exceeded expectations,” Nance said.

The analyst highlights Robinhood’s huge increase in cryptocurrency trading-related revenue in the first quarter.

“As we look ahead, we see many reasons to be positive.”

While the quarter was strong and there were positive developments, such as a strong start to the second quarter with records broken in April, analysts warn of risk/reward.

“We continue to see risk reward balanced as interest rates are likely near peaks and retail trading volumes are also near cyclical highs.”

The story continues

Needham: Todaro said first-quarter results showed strong results in business operations and managing expenses.

The analyst was “pleasantly surprised” by the crypto trading volume in the first quarter.

“April activity in equities, options and cryptocurrencies is coming in strong, indicating a positive trend for the second quarter, but we believe crypto volumes declined in May due to the slowdown in retail sentiment in the second quarter,” Todaro said.

The analyst said record options activity in April could be a story to watch and help boost total trading revenue in the second quarter.

“While we saw Q2 crypto volumes below Q1, we remain bullish on crypto activity for the full year 2024. Therefore, we increased our total crypto volume and revenue in 2024.”

JPMorgan: Worthington said the company made “strong progress in an ideal environment” in the first quarter.

“Q24 was an incredibly favorable revenue environment for Robinhood, with strong equity markets, rising retail yield and rising crypto prices,” Worthington said. said.

Average revenue per user of $103 is only slightly below the all-time peak of $116, which occurred during the “meme stock period” in early 2021, the analyst said.

“While Robinhood has leveraged cyclical market power, we have also seen examples of real growth with Robinhood capturing ~$2.8B in net deposits, +260K Gold subscribers, and +500K funded accounts from competitors.”

Mizuho: Dolev said the momentum from the first quarter carried over into the second quarter with strong April volumes.

The analyst said the first quarter was “as good as we hoped.”

“Q1 was one of the strongest pressures we have seen in recent quarters across FinTech,” Dolev said.

The analyst is encouraged by the results at the start of the second quarter, which saw many records broken in April.

“We are raising our forecasts for FY24 and FY25 to reflect continued solid execution at HOOD.”

JMP Securities: Ryan said growth at the Fintech company is “notably still accelerating.”

Record revenue and expense disciplines were highlights of the results, the analyst said.

“We expect further acceleration in deposits and new customers, with improvements to the Gold offering also making an incremental contribution,” Ryan said.

The analyst said Robinhood could continue to deliver strong growth and profitability, potentially outperforming expectations.

“We also argue that the company is positioned to meaningfully exceed market expectations from here.”

HOOD Price Action: Robinhood shares rose 1% to $17.99 on Thursday, with a 52-week trading range of $7.91 to $20.55. Robinhood shares are up 102% in the past year.

Read Next: JPMorgan Analysts Optimistic About Future Approval of Spot Ether ETFs Despite Regulatory Hurdles

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