Booming Crypto Trading Powers Robinhood (Hood) Earnings Beat, Analysts Raise Targets
Robinhood (Hood) shares appeared in pre-market activity Thursday after the famous trading app report reported a fourth quarter income defeated estimates on Wall Street driven by a massive Jump in crypto income.
The company reported $ 358 million in crypto transaction revenue in the quarter, the highest contribution from digital-asset trading to date, Wall Street Bank JPMorgan (JPM) said in a Research report Wednesday.
JPMorgan raised its target price for stock to $ 45 from $ 39, while maintaining its neutral rating. Citi (C) raised its target to $ 60 from $ 45 and maintained its neutral rating in stock. Broker Bernstein More than double the price goal of $ 105 from $ 51 and maintained an outperform rating with shares.
The stock jumped 13% to $ 63.20 in early trading Thursday following results, which was released after the market closed Wednesday.
Robinhood said Fourth-quarter income Rose 115% from last year to $ 1.01 billion, defeated the estimate of Wall Street analysts of $ 945.8 million, according to factset data. Transaction-based revenues rose 200% year-on-year, mainly due to a 700% increase in cryptocurrency revenue.
Crypto revenue usually contributes to 10% -20% of total revenue, JPMorgan said. The 46% jumped into the total cryptocurrency market cap during the season and the increase in Robinhood Notional Volume, which was 393% higher quarter-on-quarter, fuel the revenue.
The company has a major plan for the crypto business. “Management aims to add more tokens, strengthen its purse offer, add a book order with a exchange rate, Include bitstamp and explore tokenization longer, “the report said.
Robinhood has benefited from the desired trends since the beginning of the year, with “crypto market tailwinds and retail activities that remain strong,” Citi said.
If this positive backdrop is maintained, shares are likely to see support, but investors should expect volatility. While the bank became more positive in the company’s main view, it said it wanted to wait for a “more reasonable point of entry.”
Bernsain reiterated that Robinhood is the best idea in the scope of broker’s global digital assets. It said the ongoing momentum in the first quarter “was expected by the crypto volatility and a long -term price.”
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