Latest news with #RobinhoodGold
Yahoo
9 hours ago
- Business
- Yahoo
Robinhood ‘hulk smashes' earnings as push to diversify revenue pays off
The online brokerage Robinhood soared past analysts' expectations Wednesday when it posted strong financials for the second quarter. It reported a 7% quarter-over-quarter increase in revenue to $989 million, beating the FactSet consensus of almost $915 million. And it reported earnings per share of 42 cents, a beat of analysts' consensus of 31 cents. The fintech 'hulk smashe[d]' its earnings, Dan Dolev, a senior analyst at Mizuho Securities, said in a short note after Robinhood posted its quarterly results. The online brokerage, which lets users trade stocks as well as digital assets like Bitcoin and Ethereum, posted gaudy results despite a decline in crypto transaction revenue, which dipped 36% from the previous quarter to $160 million. In the past, Robinhood's quarterly fortunes have been closely tied to booms and busts in retail traders' activity in markets. During the crypto craze of early 2021, for instance, its revenue from crypto transactions made up 41% of the company's topline. But, amid the most recent so-called Crypto Winter, that percentage dipped to as low as 5% in the third quarter of 2023. As Robinhood rode the ups and downs of the stock and crypto trading cycle, the company began to build out its business to not rely merely on the whims of retail traders. It expanded its subscription business, launched its own credit card, and let users trade on margin, or take out loans to buy and sell more stock. It also pushed into banking while working expand its business in Europe and the U.K. 'In 2021, when we went public, it felt to me like we were much more fragile than today,' Robinhood CEO Vlad Tenev said during Wednesday's earnings call. While cash generated from transactions still comprised the majority of the company's revenue in the second quarter, almost 30% of its topline came from portions of its business that generate interest. These include the money it takes from users who margin trade as well as interest on users' cash balances. And almost 10% of its revenue in the second quarter came from Robinhood Gold, its subscription business in which users pay a monthly fee and receive benefits like yield on their cash reserves on the app. 'If you look at things that we expect to deliver in the short term, medium term and long term, it's pretty packed,' said Tenev. 'So this is probably the least diversified you should ever see Robinhood.' This story was originally featured on Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Should You Buy Robinhood Markets While It's Below $110?
Key Points Robinhood has a paid subscriber base of 3.2 million users. The online brokerage generated $927 million in net revenue in Q1 2025. The company has $2.2 billion in net cash on its balance sheet. 10 stocks we like better than Robinhood Markets › In January, I highlighted Robinhood Markets (NASDAQ: HOOD) as a stock to buy for long-term investors, despite doubts about whether the company could do more than disrupt the brokerage industry. Back then, it was trading around $40 per share, and many still questioned its staying power. Fast-forward six months -- not yet the long term -- and the stock has surged past $100, lifting its market capitalization to nearly $90 billion, resulting in a remarkable 173% increase year to date. With shares now near all-time highs, let's dive into what's driving this momentum, what lies ahead, what could go wrong, and whether the stock still makes sense for investors. Here's how Robinhood is growing so quickly Robinhood delivered standout Q1 2025 results, with revenue soaring 50% year over year to $927 million. The biggest driver was a 77% surge in transaction-based revenue, which climbed to $583 million. Robinhood's second-largest revenue stream, net interest income, rose 14% to $290 million, fueled by a larger base of interest-earning assets and a continued ramp-up in securities lending. Moreover, the brokerage gained $2 billion in net deposits in the quarter to a record $18 billion, and Robinhood Gold, the company's subscription offering that costs $5 per month or $50 annually, saw subscribers nearly double year over year from 1.7 million to 3.2 million. Robinhood CEO Vlad Tenev summed up the growth on the Q1 earnings call: "Customers are not only trading more with us, but they're entrusting us with more of their assets." As for how its growth is translating to the bottom line, Robinhood produced $336 million in net income, an impressive increase of 114% year over year. Can Robinhood continue to grow? As for where Robinhood goes from here, the company acquired TradePMR, a trading platform designed for independent registered investment advisors, for $300 million in cash and stock. The deal, which allows Robinhood entry into the wealth management sector, is another step in diversifying its business. Additionally, Robinhood recently closed on its $200 million acquisition of Bitstamp, the world's longest-running cryptocurrency exchange, to broaden its addressable market outside of the U.S. "Our 10-year arc, our long-term arc, is to build the No. 1 global financial ecosystem," Tenev added on Robinhood's most recent earnings call. "That means expanding our business from retail only, which it pretty much is now, to also serving businesses and institutions, and also expanding from primarily U.S. to being a full global platform serving customers everywhere." Notably, Robinhood has nine different businesses that each generate at least $100 million in annualized revenue, nearly twice as many as a couple of years ago. Tenev also mentioned other opportunities for growth, including building out 24-hour trading, 401(k) administration for businesses, and employee stock plan administration for public companies. Here's what could go wrong for Robinhood As of now, considering Robinhood's high growth, profitability, and clean balance sheet with $2.2 billion in net cash, you'd be hard pressed to find any problems with its business. However, the stock can be a different story. For high-growth companies like Robinhood, their stocks typically have two issues: share dilution and valuation. Since its IPO, Robinhood's share count has risen by 5.6%, which dilutes investors' ownership stake. The good news is that management is addressing the concern, lowering share-based compensation from $871 million in 2023 to $304 million in 2024. Additionally, management recently increased its share repurchase authorization from $1 billion to $1.5 billion, or nearly all of its $1.6 billion in trailing 12 months of net income. According to management, the buybacks will decrease its share count by approximately 1% in 2025. As for the stock's valuation, Robinhood now trades at roughly 67 times forward earnings estimates, near an all-time high. That's a steep price tag for a company still pouring resources into growth and customer acquisition. While Robinhood's roadmap includes promising new products that could eventually justify the valuation, many remain early stage ideas with no guarantee they will turn into meaningful profits. Is Robinhood stock a buy? Robinhood continues to prove its doubters wrong. With 75% of its 25 million funded accounts coming from members of the millennial and Gen Z generations, the platform is well-positioned for long-term growth as those users get older and build wealth. Still, with shares near all-time highs and valuation stretched, now may not be the best entry point. Long-term investors who believe in the vision might consider holding or dollar-cost averaging, i.e., investing a set amount at predetermined times. But chasing the stock after its massive run comes with real risk for future returns. Should you buy stock in Robinhood Markets right now? Before you buy stock in Robinhood Markets, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Robinhood Markets wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,942!* Now, it's worth noting Stock Advisor's total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Collin Brantmeyer has positions in Robinhood Markets. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Buy Robinhood Markets While It's Below $110? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
11-07-2025
- Business
- Yahoo
Ashva Capital Management: 'We See Robinhood Markets (HOOD) as a Trojan Horse in Retail Finance'
Ashva Capital Management, an investment management company, released its Q2 2025 investor letter. A copy of the letter can be downloaded here. Year-to-date (through June 30, 2025), the fund returned -1.55% compared to the S&P 500's 5.5% return. In addition, please check the fund's top five holdings to know its best picks in 2025. In its second quarter 2025 investor letter, Ashva Capital Management highlighted stocks such as Robinhood Markets, Inc. (NASDAQ:HOOD). Robinhood Markets, Inc. (NASDAQ:HOOD) is a financial services platform that allows users to invest in stocks, exchange-traded funds (ETFs), American depository receipts, options, gold, and cryptocurrencies. The one-month return of Robinhood Markets, Inc. (NASDAQ:HOOD) was 35.95%, and its shares gained 343.00% of their value over the last 52 weeks. On July 10, 2025, Robinhood Markets, Inc. (NASDAQ:HOOD) stock closed at $98.70 per share, with a market capitalization of $90.928 billion. Ashva Capital Management stated the following regarding Robinhood Markets, Inc. (NASDAQ:HOOD) in its second quarter 2025 investor letter: "Robinhood Markets, Inc. (NASDAQ:HOOD) is not just a brokerage app—it's a disruptive financial platform rewriting the rules of consumer finance. With its $0 trading model, Robinhood forced incumbents to adapt, but now it's doing the same to banking. The newly launched Robinhood Gold credit card offers 3% cash back—confounding traditional banks. Why? Because Robinhood doesn't have the legacy cost structure of old-world financial institutions. This card is more than just a product; it's one of the most brilliant customer acquisition tools we've seen in fintech. We see Robinhood as a Trojan horse in retail finance—nimble, bold, and rapidly expanding its ecosystem." A successful business person confidently managing their finances on a mobile device. Robinhood Markets, Inc. (NASDAQ:HOOD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 76 hedge fund portfolios held Robinhood Markets, Inc. (NASDAQ:HOOD) at the end of the first quarter, which was 79 in the previous quarter. While we acknowledge the potential of HOOD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Robinhood Markets, Inc. (NASDAQ:HOOD) and shared the list of best fintech stocks to buy. Parnassus Mid Cap Growth Fund added Robinhood Markets, Inc. (NASDAQ:HOOD) to its portfolio in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
10-07-2025
- Business
- Yahoo
Robinhood (HOOD): A Bull Case Theory
We came across a bullish thesis on Robinhood on Investing City's Substack by Ryan Reeves. As of 1st July, Robinhood's share was trading at $92.33. HOOD's trailing and forward P/E were 52.76 and 65.36 respectively according to Yahoo Finance. Robinhood, a discount brokerage firm, has been a game-changer in the financial industry by making stock trading fun and accessible with its user-friendly interface and 'free' trades. However, the company's business model, which relies heavily on payment for order flow (PFOF), has raised concerns about its integrity. PFOF involves Robinhood taking a percentage of the spread between the bid and ask in a stock, with market makers like Citadel and Virtu paying the company for routing orders. This model has been criticized for potentially prioritizing profits over customers' best interests, although regulations are in place to protect retail investors. Despite these concerns, Robinhood's business has been thriving, with 25 million funded accounts and $193 billion in assets under custody. The company's average revenue per funded customer is around $120, with 60% of revenue coming from transaction revenue and 40% from interest revenue and subscriptions like Robinhood Gold. The company's ambitious plans to expand its services, including AI equity research assistants, private banking, and real estate offerings, present significant growth opportunities. Robinhood Gold, a $50/year subscription, provides perks like 4.5% APY on uninvested balances and has already attracted 10% of users, generating over $130 million in recurring revenue. The key to Robinhood's future success lies in increasing its assets under custody per customer, which currently stands at around $7,700, significantly lower than competitors like Schwab. With a 35x growth opportunity, Robinhood has a long runway for growth, particularly in its banking offerings. However, the company's lack of transparency about its business model may hinder its ability to garner trust from customers. By being more straightforward about its PFOF model and emphasizing its benefits, such as providing better pricing than national best bid and offer, Robinhood can build a loyal customer base and achieve long-term success. Previously, we covered a bullish thesis on Robinhood by Brett Schafer in May 2025, which highlighted the company's potential as a backdoor play on the AI energy boom through its critical energy infrastructure assets. The stock has appreciated by 43.74% since our coverage, as the thesis played out with the company benefiting from the AI energy spike. Ryan Reeves shares a similar view, emphasizing Robinhood's growth opportunities in AI-powered equity research assistants and expanding services. However, Reeves focuses on the company's core discount brokerage business, citing 25 million funded accounts and $193 billion in assets under custody. HOOD isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of HOOD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Business Insider
19-06-2025
- Business
- Business Insider
Higher Market Volatility and Trading Volume Catalyze Robinhood Markets Stock (HOOD)
Robinhood Markets (HOOD) stock is undeniably popular right now, but this popularity means investors must be cautious about potential overvaluation. Despite these concerns, the company is doing remarkably well, and management has truly come into its own. With Robinhood's brand evolving from a meme-stock retail investing app into a holistic financial platform for the masses, it's difficult not to be bullish on HOOD in the long term. However, despite the bullish cheer, I'm taking a Neutral position on HOOD while awaiting better levels. Confident Investing Starts Here: HOOD Stock Demonstrates Unbreakable Momentum Robinhood stock is up by approximately 90% year-to-date and by about 230% over the past 12 months, which is impressive and significantly outperforms the broader market. Arguably, Robinhood is becoming more relevant than ever as artificial intelligence (AI) and automation gain momentum. Geopolitical uncertainty, greater volatility, and higher trading volumes are the fuel, while technology is the trigger for HOOD stock outperforming the S&P to the degree it has so far this year. As automation increasingly replaces manual labor, investing and capital allocation are poised to become more accessible across all demographics, and Robinhood is well-positioned to lead this shift. In its latest earnings report, Robinhood delivered impressive results: net income surged to $336 million, revenue grew 50% year-over-year, and net interest income accounted for 30% of total revenue. Assets Under Custody reached $255 billion, nearly doubling from the prior year. The company is effectively converting its 25.9 million funded users into recurring revenue through offerings like Robinhood Gold, which now boasts 3.2 million subscribers—a 90% year-over-year increase. These robust financials help explain sustained investor confidence. While a short-term pullback may be on the horizon, I see it as temporary. With greater macroeconomic clarity expected in 2026, Robinhood appears poised for a continued upward trajectory. In terms of earnings, HOOD reported that its income more than doubled to $336 million, up 114% from the prior year, delivering $0.37 per share. AI, Crypto, and International Expansion Fuel the Bull Case Robinhood is actively expanding its platform and positioning itself at the forefront of financial innovation. The company recently launched Robinhood Cortex, an AI-powered market insight assistant that delivers real-time analytics and personalized trade ideas. Designed to boost user engagement, retention, and conversions to Robinhood Gold, Cortex adds a monetizable layer to the platform. AI integration will also enhance Robinhood Legend, the firm's advanced trading platform designed to attract professional investors and broaden Robinhood's total addressable market. Robinhood has also made a bold move into crypto with its $200 million acquisition of Bitstamp, securing EU crypto licenses, expanding its international footprint, and onboarding over 500,000 funded accounts and 5,000 institutional clients. This marks a strategic shift into high-level M&A for a brand often seen as retail-focused. International growth is another key focus, with Robinhood planning to launch a UK Stocks & Shares ISA, tapping into a market that draws £70–80 billion in annual subscriptions. This expansion positions Robinhood as a serious challenger to incumbents like Hargreaves Lansdown (HRGLF) and AJ Bell, laying the groundwork for broader European fintech expansion and global financial relevance. Value Investors Buy the Dips To be a successful value investor, it's essential to deeply understand both the industry and the specific risk profile of the company you're investing in. While Robinhood has shown impressive growth—especially through international expansion—its revenue growth is likely to moderate in the medium term. Currently, the stock trades at a price-to-sales ratio of 21, well above its five-year average of 7.5. Annual revenue growth has increased modestly from a five-year average of 52% to 60% year-over-year. Much of the recent bullish sentiment stems from improving profitability as the company starts to realize returns on its long-term investments. While valuation is partially driven by market sentiment, that only goes so far. With shares trading well above both their 50-day and 200-day moving averages and an RSI near 70, Robinhood appears technically overbought. This doesn't reflect poorly on the company's fundamentals—it simply suggests that now may not be the ideal entry point. Great value investors wait for moments of weakness, not strength, to buy into quality names like Robinhood. Is Robinhood Markets Stock a Buy or Sell? Wall Street currently rates Robinhood as a Moderate Buy, with 14 Buy ratings, five Holds, and one Sell. However, HOOD's average stock price target of $62 suggests a potential 17% downside over the next 12 months. That aligns closely with my own assessment: Robinhood is a strong company with solid fundamentals, but current valuation levels make it an unfavorable entry point for new investors. A Bad Time to Invest in a Great Company Robinhood is undoubtedly one of the most exciting companies on my radar at the moment. However, excitement doesn't always equate to a wise buying opportunity. Ultimately, valuation reigns supreme—and at today's levels, the stock appears overvalued. I'm holding off until the market offers a more reasonable entry point. When the next significant pullback comes, I'll likely be among the first to buy in. Patience is a cornerstone of successful investing, and in this case, it's a principle I'm fully committed to.
