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Robinhood Markets (HOOD) is a digital financial services firm based in the U.S. that allows its users to invest in stocks, options, exchange-traded funds (ETFs), and cryptocurrencies. Incorporated in 2013, the company now has a user base of 25.2 million funded accounts.
Robinhood’s stock has seen tremendous growth in the last couple of years. Shares are up 370% over the past two years, up more than 104% over the past 52 weeks, and up 10.3% in the year to date. However, shares have not been immune from the broader market selloff, and are down nearly 40% from their 52-week high.
Robinhood Beats Analysts
Robinhood reported its fourth-quarter results last month on Feb. 12 posting a net profit of $916 million, a 10X increase from the same quarter last year. This translates to a profit of $1.01 per diluted share, coming in against analysts’ estimates of $0.44 per share. Revenue for the quarter totaled$1.01 billion, up 115% year-over-year while beating the $941.4 million estimate.
For fintech companies like Robinhood, metrics like average revenue per user (ARPU) are critical. Robinhood doubled its ARPU in the quarter to $164.
Robinhood Expands to Wealth Management and Banking
Robinhood announced on Wednesday, March 26 its entry into the wealth management and banking industry. Its wealth management branch will be called “Robinhood Strategies” and will cost users a 0.25% annual charge with a ceiling of $250 for its “Gold” members.
Robinhood management sees the move as a chance to “democratize” personalized wealth management instead of reserving it for affluent clients. It is also a chance to reach retail investors who are increasingly seeking professional advice.
The company will roll out its banking services later this year with solutions covering real estate, tax advice, and benefits including tickets to the Oscars and the Met Gala.
Additionally, Robinhood will also release an AI investment tool in late 2025 aiming to provide real-time analytics and insights.
Analyst Ratings on HOOD
Analysts are optimistic about the financial services company and have a “Moderate Buy” rating with a mean price target of $65.63, reflecting upside potential of 56% upside from current prices.
