Robinhood set to report highest quarterly revenue since meme stock frenzy

Trading app Robinhood Markets is expected to report its perfect quarterly revenue in nearly three years, helped by a right rebound in fairness markets and crypto purchasing and selling.

Bets on global interest price cuts despatched U.S. shares and bitcoin to document highs earlier this 12 months and attracted merchants aid to markets, serving to the retail investor-focused brokerage in finding more transaction-based revenue.

Robinhood, at the heart of the meme stock frenzy in 2021, is bouncing aid from a slowdown in retail purchasing and selling process that adopted the pandemic-led purchasing and selling process surge.

“Within the core commercial, we noticed a wide rebound in volumes this quarter all over equities, alternate choices and crypto with total volumes up nearly 20 per cent in Q1 thru February reported metrics,” J.P.Morgan analysts said.

The right retail purchasing and selling process despatched Robinhood’s shares up 58 per cent within the first three months of the 12 months, the sharpest quarterly stock surge since its itemizing.

THE CONTEXT

Data from overview agency Apptopia showed each day lively customers for Robinhood surged 65 per cent in March from a 12 months earlier, while total fresh mobile app downloads jumped 94 per cent all the blueprint in which thru the identical interval.

Menlo Park, California-based Robinhood, which made commission-free purchasing and selling mainstream, will in finding pleasure from a soar in secure interest revenue. Robinhood lets clear possibilities borrow cash to buy securities.

Get interest revenue, the ideal driver of the company’s high line, is expected to soar 24 per cent to $258.24 billion within the first quarter, based on LSEG knowledge.

“On-line retail brokers noticed right relate in both purchasing and selling volumes and margin mortgage balances, and ought to peaceful proceed to in finding pleasure from better-for-longer charges,” said Patrick Moley, analyst at Piper Sandler.

Robinhood’s property below custody (AUC) breached the $100 billion designate for the second consecutive month in February with the company reporting a surprise revenue within the final quarter of 2023 and aiming for a success relate in 2024.

THE FUNDAMENTALS

** Robinhood, which reports first-quarter outcomes on Wednesday, is expected to post its strongest quarterly revenue since the second quarter of 2021

** Analysts forecast a 24 per cent rise in revenue to $548.61 million, helped by secure interest revenue relate – LSEG

** Crypto purchasing and selling revenue is probably to bigger than double from a 12 months earlier to $80 million

WALL STREET SENTIMENT

** The frequent recommendation of 17 brokerages retaining Robinhood is “protect”

** Median price target for the company is $19, up 65 per cent from three months within the past

** Robinhood trades 64.01 cases its ahead earnings estimate, when in contrast to alternate median of 10.97

** Inventory hit a bigger than two-12 months high in gradual-March, but has larger than halved in cost since its July 2021 market debut