Analysts reported that the positive momentum observed in the first quarter has persisted, with the trading platform receiving an all-time high of $5 billion in deposits in April.
Robinhood (HOOD) unveiled robust first-quarter earnings, fueled by a surge in crypto trading, resulting in a 40% year-on-year revenue increase. This led some analysts to revise their earnings estimates and price targets upward. KBW lifted its price target to $21.50 from $20, maintaining its market perform rating, while rival broker JMP raised its price target to $30 from $28, reiterating its market outperform rating. Following these updates, the shares, which closed at $17.85 the previous day, surged over 4% in early Thursday trading, marking a more than 40% gain for the year.
KBW analysts, led by Kyle Voigt, described the quarter as a “solid beat” with stronger-than-expected crypto trading revenues driving higher earnings per share (EPS). They noted that crypto transaction revenue more than tripled compared to the year-earlier quarter. Additionally, KBW highlighted the positive reception of new products like the platform’s Gold Card and the expansion of the business’ EBITDA margin.
JMP emphasized Robinhood’s record net new deposits of $11.2 billion, with a significant portion coming from customers with over a year of platform experience. The platform saw an influx of 500,000 new accounts in the quarter, surpassing last year’s total and marking the highest quarter for new accounts since the first quarter of 2022. Continuing the positive trend, April witnessed a record $5 billion in deposits compared to the first-quarter monthly average of $3.7 billion.
JMP analysts, led by Devin Ryan, anticipate further growth in deposits and new customers, with improvements to the Gold offering expected to contribute increasingly. Despite regulatory challenges, Bernstein remains optimistic about Robinhood’s crypto business, expecting continued customer engagement in crypto trading amid ongoing regulatory developments.
Bernstein analysts Gautam Chhugani and Mahika Sapra expressed confidence in Robinhood’s resilience against regulatory pressures and anticipate sustained customer traction in crypto trading amidst ongoing regulatory clarity efforts.
