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Robinhood (HOOD), an online financial technology broker, saw its shares fall over 10% in premarket trading after it released its third-quarter earnings report. The research report showed disappointing results in several important areas. Meanwhile, JPMorgan said the negative market reaction was expected because the stock had already done well throughout the year. This likely raised peopleâs expectations.
JMP Broker Still Positive About HOOD Shares
The Wall Street bank pointed out that Robinhood needs to do better in key areas, such as account growth, new net assets, trading activity, and subscriptions for its premium gold accounts. In the third quarter, net deposits were $10 billion. This amount is the lowest quarterly deposit, below JPMorganâs estimated $11.2 billion.
Robinhoodâs trading platform became very popular with retail investors. However, the companyâs financial results show a slowdown as market conditions change. This has led analysts to debate whether the platform can keep growing its customer base and diversify its revenue streams.
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Moreover, JMP Securities has raised its price target for Robinhood shares from $30 to $33. Despite missing its earnings expectations, Robinhoodâs efforts to cut costs and improve its platform could help it grow in the long run. However, the recent earnings report showing a slowdown suggests the companyâs future may be tough.
Robinhood Q1 Performance
Amidst regulatory concerns, Robinhoodâs Q1 performance exceeded industry expectations, with reported revenue of $618 million. This reported revenue beats the $534.5 million estimated by investment research firm Zacks by 15.6%. Hence, the positive outcome and increased trading volume led to a surge in Robinhoodâs shares, rallying 7.3% to $19.15 in after-hours trading.
Although the share price slightly decreased to $18.55, Robinhoodâs stock has seen a 44.3% increase year-to-date. Also, the company reported custodying $26.2 billion worth of crypto for users, marking a substantial 78% rise from the previous.
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Robinhood Expansion of Operations
Robinhood is on an expansion spree. As per an earlier report from TheCoinRise, the trading platform acquired credit card startup X1 for a whopping $95 million. According to the company, the acquisition was important in developing a close bond with its current clients.
Likewise, Robinhood Crypto EU recently added a new cryptocurrency to the list of cryptocurrencies it supports. As announced, it added Stellar (XLM) to its list of crypto transfers. This development allows users to withdraw and deposit XKM within the Robinhood platform. As per the update, users get a 1% deposit bonus reward.
Meanwhile, the development is similar to Robinhoodâs expansion of crypto offerings to New York residents earlier this year. On that occasion, the online fintech broker added three new assets: XLM, Uniswap (UNI), and Tezos (XTZ).
