Booming Crypto Trading Powers Robinhood Earnings Beat, Analysts Raise Targets

Key Points

  • Robinhood reported a massive jump in crypto revenue, contributing to a 115% increase in Q4 revenue to $1.01 billion.
  • JPMorgan and Citi raised their price targets for Robinhood stock, with Bernstein more than doubling its price objective to $105.
  • The company plans to expand its crypto offerings, including adding more tokens and enhancing wallet functionalities.

Summary

Robinhood's shares experienced a significant pre-market surge following the release of their fourth-quarter earnings, which exceeded Wall Street expectations. The company's revenue was bolstered by a record-breaking $358 million in crypto transaction revenue, marking the highest contribution from digital-asset trading to date. This led to a 115% year-over-year increase in total revenue to $1.01 billion, surpassing analysts' estimates. The crypto market's favorable conditions, including a 46% increase in total market cap and a 393% rise in Robinhood's notional volumes, were key drivers behind this performance. Financial institutions like JPMorgan, Citi, and Bernstein responded positively, adjusting their price targets upwards while maintaining or upgrading their ratings on the stock. Robinhood aims to further expand its cryptocurrency services, planning to add more tokens, enhance wallet offerings, and explore tokenization. Despite the positive outlook, analysts suggest that investors might expect volatility and should look for a more reasonable entry point into the stock.

coindesk
February 13, 2025
Crypto
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