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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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
-
Stocks Struggle Ahead of November Jobs Report: Stock Market TodayOracle and Broadcom continued to fall, while market participants looked ahead to Tuesday's jobs report.
-
7 Dr. Seuss Quotes Retirees Should Live ByYou're off to great places! Why Dr. Seuss is the retirement guru you didn't know you needed.
-
Fed's Rate Cuts Could Have Impacts You Might Not AnticipateUnderstanding how lower interest rates could impact your wallet can help you determine the right financial moves to make.
-
Stocks Struggle Ahead of November Jobs Report: Stock Market Today
Oracle and Broadcom continued to fall, while market participants looked ahead to Tuesday's jobs report.
-
Past Performance Is Not Indicative of Your Financial Adviser's ExpertiseMany people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the CaseA retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
