Can Robinhood Markets Keep the Earnings Surprise Streak Alive?

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Robinhood Markets, Inc., which belongs to the Zacks Financial - Investment Bank industry.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 150%.

For the last reported quarter, Robinhood Markets came out with earnings of $0.21 per share versus the Zacks Consensus Estimate of $0.15 per share, representing a surprise of 40%. For the previous quarter, the company was expected to post earnings of $0.05 per share and it actually produced earnings of $0.18 per share, delivering a surprise of 260%.

Thanks in part to this history, there has been a favorable change in earnings estimates for Robinhood Markets lately. In fact, the Zacks Earnings ESP for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

Robinhood Markets has an Earnings ESP of +31.33% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #1 (Strong Buy), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on October 30, 2024.

When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.

Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.

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