Robinhood Markets (HOOD) stock soared out of the gate Thursday after the online investing platform crushed top- and bottom-line expectations for its fourth quarter.
In the three months ending December 31, Robinhood's revenue more than doubled year over year to $1 billion, driven by transaction-based revenue that tripled to $672 million. This included a sevenfold surge in cryptocurrencies revenue to $358 million. Its earnings per share (EPS) improved to $1.01 from 3 cents in the year-ago period.
"Q4 was a record-breaking quarter that caps off a record-setting year in 2024," said Robinhood Chief Financial Officer Jason Warnick in a statement. "For both the quarter and full year, we reached new highs for Assets Under Custody, Net Deposits, Gold Subscribers, Revenues, Net Income, Adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization], and EPS."
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Warnick adds that Robinhood entered the new year with "strong momentum" and remains "focused on delivering another year of profitable growth."
Robinhood's results crushed analysts' expectations. Wall Street was anticipating revenue of $946 million and earnings of 42 cents per share, according to MarketWatch.
"We hit the gas on product development in 2024 with a new platform for active traders, Gold Card launch, an expanded U.K. and European Union product suite, and much more," said Robinhood CEO and co-founder Vlad Tenev in a statement. "We see a huge opportunity ahead of us as we work toward enabling anyone, anywhere, to buy, sell, or hold any financial asset and conduct any financial transaction through Robinhood."
Is Robinhood stock a buy, sell or hold?
Robinhood's post-earnings pop is just more of the same for the financial stock. Indeed, shares had surged more than fivefold in the past 12 months heading into Thursday's session. Unsurprisingly, Wall Street is bullish on the large-cap stock. According to S&P Global Market Intelligence, the consensus recommendation among analysts it tracks is a Buy.
However, analysts' price targets have not been able to keep up with the online broker's surging stock price. The average analyst price target of $59.65 represents a discount to current levels.
Financial services firm Needham maintained its Buy rating on HOOD after earnings, but raised its price target to $70 from $52.
"Robinhood is positioned to be a major beneficiary of more positive regulation within the crypto space, while emerging as a leader in its equity and options offering via advanced trading product launches," says Needham analyst John Todaro.
The analyst adds that new crypto-related product launches this year, particularly those targeted to retail investors, "should allow the company to take share from centralized and decentralized peers."
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