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
-
DIY Retirement Planning: A Smart Move or a Risky Endeavor?You can cut the cost of retirement planning by doing it yourself. But for something this important, it might be wiser to call in the professionals.
-
Galentine's Day: A Time to Promote Financial Literacy Among FriendsHere are three things women can do to help their friends gain financial knowledge and confidence.
-
DIY Retirement Planning: A Smart Move or a Risky Endeavor?
You can cut the cost of retirement planning by doing it yourself. But for something this important, it might be wiser to call in the professionals.
-
Galentine's Day: A Time to Promote Financial Literacy Among Friends
Here are three things women can do to help their friends gain financial knowledge and confidence.
-
Stock Market Today: Markets Turn Lower on Nasty Inflation SurpriseEquities sold off after a hot reading on consumer price inflation pushed back rate cuts to autumn or year-end.
-
CPI Report Puts the Kibosh on Rate Cuts: What the Experts Are Saying About InflationCPI Consumer price inflation reared its ugly head to start the year, dashing hopes for the Fed to lower borrowing costs anytime soon.
-
These Two Issues Are Critical to Efficient Retirement PlanningYou're saving hard for retirement, but if you're not thinking ahead about taxes and the cost of health care, your savings — and your legacy — could be at risk.
-
How to Use Good Debt (While Identifying and Avoiding Bad Debt)Not all debt is bad, but knowing the difference between good debt and bad debt and how to use them can help you get ahead financially and stay ahead.
-
Stock Market Today: Markets Reflect Elevated UncertaintyInvestors and traders as well as CEOs and central bankers continue to adjust to a new administration in Washington, D.C.
-
DuPont Stock Jumps After Sales, Earnings Top ExpectationsDuPont stock is higher Tuesday after the materials company beat expectations for its fourth quarter and reiterated plans for its upcoming spinoff.
