Robinhood To Gain From Higher Trading Volumes, Expanding Product Portfolio, Solid Geographic Reach: Analyst

Mizuho analyst Dan Dolev reiterated a Buy rating on Robinhood Markets, Inc. HOOD, raising the price forecast to $20 from $17.

Robinhood said total funded customers grew to 23.6 million at the end of February, up approximately 130,000 from January.

AUC accelerated to ~$120 billion, trading volumes for all assets re-accelerated sequentially, and traders were the most active since January ’22, Dolev writes.

Most significantly, net deposits for the quarter so far have already reached >$7 billion, well ahead of the prior high quarter of $4.6 billion, the analyst adds.

According to the analyst, this month’s results support the view that Robinhood remains a “share gainer” in trading and industry assets as it expands its product set and geographic reach. 

Trading metrics also increased sequentially, primarily with equity Daily Average Revenue Trades (‘DARTs’) increasing to 1.9 million from 1.7 million and options DARTs increasing to ~800K from ~700K. 

Dolev says this is indicative of the improvement of trading activity, particularly among Robinhood’s core active base.

The analyst also remains upbeat about the company’s international expansion, which continues with potential eyes on Asia.

Robinhood is a natural beneficiary of AI, the analyst writes, adding that Strong Robinhood Gold attach rates and the March “Gold Standard” event can be the next catalysts.

Dolev expects the company’s FY24 revenues to grow by 11% year over year to $2.078 billion. 

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Price Action: HOOD shares are trading lower by 0.22% to $18.02 on the last check Friday.

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