Robinhood Delivers 'Solid End To 2023': 5 Analysts Comment On Q4 Print, Outlook

Shares of Robinhood Markets Inc HOOD gained in premarket trading on Wednesday, after the company’s upbeat results for the fourth quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

• KeyBanc Capital Markets analyst Alex Markgraff maintained an Overweight rating, while lifting the price target from $14 to $15.
• Piper Sandler analyst Patrick Moley reiterated a Neutral rating, while raising the price target from $11.50 to $12.50.
• JMP Securities analyst Devin Ryan reaffirmed a Market Outperform rating, while raising the price target from $23 to $25.
• Mizuho Securities analyst Dan Dolev maintained a Buy rating and price target of $15.
• Needham analyst John Todaro reiterated a Hold rating on the stock.

Check out other analyst stock ratings.

KeyBanc Capital Markets: Robinhood Markets reported its fourth-quarter revenues around 4% higher than Street expectations and an adjusted EBITDA beat of about 36% on better opex leverage, Markgraff said in a note. “Transaction revenue was led higher by crypto and options trading,” he added.

Although management released “limited” guidance for 2024, “MSD opex growth (midpoint, adj. for SBC cancellation charge in FY23) and early 1Q24 net deposit momentum is likely to be well-received,” the analyst further wrote.

Piper Sandler: Robinhood Markets reported its fourth-quarter revenues and earnings ahead of expectations, while expenses were contained below projections, Moley said. The company has witnessed “very strong net deposit trends” so far in the first quarter, he added.

Robinhood Gold subscribers grew by 25% year-over-year in the fourth quarter and the company reported 60,000 new subscribers in January alone, the analyst further stated.

JMP Securities: Robinhood Markets delivered a “strong end” to 2023 and provided positive commentary for 2024, Ryan said. “Revenues were supported by higher net interest revenue (~$4M above our estimate) and better transaction-based revenue (~$5M above)."

“Lower expenses were driven by better technology & development expense and better G&A, offsetting a higher marketing expense, which we view favorably given the success with a number of promotions in the quarter,” the analyst further wrote.

Mizuho Securities: Robinhood Markets reported revenues of $471 million and EBITDA of $133 million, higher than the estimates of $464 million and $115 million, respectively. “MAUs were 10.9mn, up from 10.3mn in September,” Dolev added.

While average revenue per user (ARPU) rose to $81, from the previous quarter’s $80, trading revenue of $200 million were supported by “solid” crypto and options revenues of $43 million and $121 million, respectively, the analyst stated.

Needham: "Transaction revenues & volumes increased sharper than expected in Dec. '23 across equities, options, and crypto while interest income came inline with Street estimates,” Todaro wrote in a note.

Crypto volumes were the strongest since the September 2022 quarter, the analyst said. “We highlight crypto trading in particular as a bright spot given the growth from a lower baseline as crypto emerges from a low volume, bear market,” he added.

HOOD Price Action: Shares of Robinhood Markets rose by 14.86% to $13.60 in the premarket session on Wednesday.

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