Shares of Robinhood (NASDAQ:HOOD) surged in after-hours trading after the financial services platform reported earnings for its first quarter of Fiscal Year 2024. Earnings per share came in at $0.18, which beat analysts’ consensus estimate of $0.06 per share.
Sales increased by 40.1% year-over-year, with revenue hitting $618. This beat analysts’ expectations of $555 million. This growth was primarily driven by a growth in interest-earning assets, higher short-term rates, and an increase in transactions. Specifically, the recent hype around cryptocurrencies like Bitcoin (BTC-USD) brought in $126 million for the company, a 232% increase compared to Q1 2023.
In addition, the number of monthly active users increased by 16% year-over-year to 13.7 million, with average revenue per user jumping 35% to $104. Interestingly, according to TipRanks’ “Bulls Say, Bears Say” tool pictured below, bearish analysts claim that the company’s average revenue per customer is substantially lower than its peers.
However, this could provide the company with more runway for growth going forward, as it suggests that Robinhood is currently pricing its services competitively and has room to increase fees.
Is HOOD a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on HOOD stock based on four Buys, seven Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 96% rally in its share price over the past year, the average HOOD price target of $19.58 per share implies 9.8% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
