Robinhood Shares Surge 13% After Q4 Earnings Beat, Crypto Revenue Hits New High
Shares of Robinhood (HOOD) soared 13% in pre-market trading on Thursday after the company reported impressive fourth-quarter earnings that outperformed Wall Street expectations, with a notable surge in crypto revenue.
Robinhood revealed $358 million in crypto transaction revenue for the quarter, marking the highest contribution from digital asset trading to date. JPMorgan (JPM) highlighted the growth in a research note on Wednesday, increasing its price target for Robinhood to $45 from $39 while maintaining a neutral rating. Citi (C) followed suit by raising its target to $60 from $45, also maintaining a neutral stance. Bernstein raised its target significantly to $105 from $51, maintaining an outperform rating on the stock.
Following the release of the earnings report after Wednesday’s market close, Robinhood’s stock price jumped to $63.20 in early trading on Thursday. The company reported total revenue of $1.01 billion for Q4, a 115% year-over-year increase, surpassing analysts’ estimates of $945.8 million, according to FactSet data. Transaction-based earnings rose 200%, largely driven by a staggering 700% increase in crypto revenue.
While crypto typically accounts for 10%-20% of Robinhood’s total revenue, JPMorgan noted that the 46% growth in the total cryptocurrency market cap and a 393% quarter-over-quarter rise in Robinhood’s crypto volume were key drivers behind the company’s earnings beat.
Robinhood has ambitious plans for its crypto business moving forward. The company aims to add more tokens, enhance its wallet features, introduce an order book with exchange routing functionality, integrate with Bitstamp, and explore long-term tokenization opportunities.
According to Citi, Robinhood is benefiting from favorable trends in both the crypto market and retail trading, which has supported its stock price. However, Citi warned that the stock could remain volatile and suggested waiting for a more favorable entry point despite raising its outlook on Robinhood’s fundamentals.
Bernstein maintained that Robinhood is a top pick in its global digital assets coverage, with expectations for continued momentum in the first quarter driven by crypto volatility and a favorable price cycle.
