Robinhood Markets (HOOD) stock is higher in Thursday's session after the online brokerage platform reported record strong second-quarter results, beating expectations on both the top and bottom lines.
In the three months ended June 30, Robinhood said its revenue increased 40.3% year-over-year to $682 million, driven by a 69.4% jump in transaction-based revenues to $327 million. This included a 161% increase in cryptocurrency revenue to $81 million.
HOOD's profitability also improved, with the company reporting earnings per share (EPS) of 21 cents compared with 3 cents in the year-ago period.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"This quarter, we kept up the pace with rapid product launches and a relentless drive to provide top value for our customers," said Robinhood CEO Vlad Tenev in a statement. "With Robinhood Gold [the company's paid subscription service] reaching 2 million subscribers, we're witnessing the flywheel accelerate."
The trading platform's results handily topped analysts' expectations. Wall Street was anticipating revenue of $643.3 million and earnings of 15 cents per share, according to Reuters.
"I'm encouraged by the progress we're making as a business," said Robinhood Chief Financial Officer Jason Warnick in a statement. "In Q2, we set new quarterly records for revenues and earnings per share as we continue to focus on delivering another year of profitable growth."
Is Robinhood stock a buy, sell or hold?
Robinhood has also shown tremendous growth on the price charts, with shares up nearly 40% for the year to date. And Wall Street is bullish that the financial stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for HOOD stock is $22.91, representing implied upside of more than 30% to current levels. Additionally, the consensus recommendation is a Buy.
Speaking for the bulls is Mizuho Securities analyst Dan Dolev, who has an Outperform (Buy) rating on Robinhood. "There was a lot to like about HOOD's Q2 including a record $13 billion net deposits," Dolev says, adding that the momentum has continued in July and August.
"In our view, despite already strong momentum, HOOD is still in its early stages of disrupting the Brokerage industry and has plenty of runway from here," he notes.
Separately, Needham analyst John Todaro says that "HOOD is doing everything right in our view from a cost discipline and product initiative standpoint, and we are excited about the Bitstamp and Pluto Capital acquisitions." However, Todara maintained a Hold rating after earnings amid a cautious near-term "outlook for retail investor appetite."
Related Content
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility BillsIf passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
What Boomers and Gen Xers Can Learn from Younger ColleaguesWhether you're Gen X or a baby boomer, your younger colleagues' opinions on work may help you find a new job or be happier in the one you've got.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
Stock Market Today: Good Feelings and Solid Data Lift StocksResilience and de-escalation defined another generally positive day for financial markets.
