Robinhood Reports Record Q1 Earnings After Cryptocurrency Surge

Robinhood Markets (HOOD) stock jumped more than 8% out of the gate Thursday after the online brokerage platform reported record first-quarter results that crushed expectations on both the top- and bottom-lines. Shares have since pulled back, however, with HOOD in negative territory at midday.

In the three months ended March 31, Robinhood said its revenue surged 40% year-over-year to $618 million, driven by a 59% rise in transaction-based revenues to $329 million. This included a 232% increase in cryptocurrency revenue which coincided with a roughly 60% rise in bitcoin's price in the first quarter. 

HOOD also swung to earnings of 18 cents per share from a loss of 57 cents in the year-ago period.

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"We delivered significant revenue growth and margin expansion in Q1 as we remain focused on driving another year of profitable growth in 2024," Robinhood Chief Financial Officer Jason Warnick said in a statement. "In Q1, we set records for quarterly revenues, net income, and EPS, even as we stepped up our marketing and growth investments."

Robinhood's results blew past analysts’ expectations. According to CNBC, Wall Street was anticipating revenue of $549 million and earnings of 6 cents per share.

"We continued to aggressively execute on our product roadmap in Q1, leading to all-time highs for net deposits and gold subscribers," Robinhood CEO and co-founder Vlad Tenev said in a statement. "Q2 is off to a strong start with April being our highest month of the year for net deposits and gold subscriber growth, and we're excited to see strong interest from over 1 million customers in our Robinhood Gold Card."

Is Robinhood stock a buy, sell or hold?

According to S&P Global Market Intelligence, the consensus analyst target price for the financial services stock is $19.87, representing implied upside of more than 10% to current levels. Meanwhile, the consensus recommendation on the online broker and trading platform is Hold.

Commenting on the first-quarter results, Needham analyst John Todaro said, "HOOD posted a strong beat on top-line and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] driven by options and crypto activity."

The analyst adds that crypto volume was up three times over Q4 2023. "HOOD is doing a great job managing expenses, with costs coming in below our estimates in nearly every category," Todaro says. 

Despite the positive commentary, the analyst has a Hold rating on Robinhood stock.

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