On Thursday, Piper Sandler adjusted its price target for Robinhood Markets (NASDAQ:HOOD) shares, increasing it to $18.00 from the previous $17.00, while maintaining a Neutral rating on the stock. This adjustment follows Robinhood's report of stronger-than-anticipated first-quarter earnings.
Robinhood announced a GAAP earnings per share (EPS) of $0.18, which surpassed both Piper Sandler's estimate of $0.08 and the consensus estimate of $0.06.
The earnings beat was largely attributed to higher transaction revenues, especially from cryptocurrency trading, which resulted in an $45 million, or 8%, revenue beat compared to Piper Sandler's total revenue estimate.
The company also reported lower expenses, which were $24 million, or 5%, below what Piper Sandler had estimated.
In addition, Robinhood's adjusted EBITDA for the first quarter of 2024 was reported at $247 million, which not only represents an 86% increase from the previous quarter but also a 115% rise year-over-year, outperforming Piper Sandler's estimate of $197 million.
Following the announcement of the first-quarter results, Robinhood's shares saw an uptick, trading more than 4% higher after hours. This positive market reaction is believed to be a response to the combination of the first-quarter earnings beat and the continued strong asset gathering trends observed in April.
InvestingPro Insights
As Robinhood Markets (NASDAQ:HOOD) continues to capture investors' attention with its first-quarter performance, insights from InvestingPro can offer additional context. Analysts are optimistic about the company's profitability, with net income expected to grow this year and three analysts having revised their earnings upwards for the upcoming period. This aligns with the strong earnings beat Robinhood reported, which may justify the recent price target adjustment by Piper Sandler.
InvestingPro Data shows a significant 125.09% price uptick over the last six months, with a robust 54.55% return over the last three months. Furthermore, Robinhood's revenue growth of 36.13% in the last twelve months as of Q1 2024 demonstrates the company's expanding financial base. Despite a negative P/E Ratio of -29.32, the company's gross profit margin stands impressively at 85.01%, indicating efficiency in its operations.
InvestingPro Tips suggest that while Robinhood is trading at a high earnings multiple, the strong return over the last year of 95.94% and the analysts' prediction of profitability this year indicate potential for continued growth. Additionally, there are more tips available on InvestingPro for those looking to dive deeper into Robinhood's financials and forecasts. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for even more expert insights into your investment decisions.
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