Robinhood (HOOD) shares surged in pre-market exercise Thursday after the favored buying and selling app reported fourth-quarter earnings that beat Wall Avenue estimates pushed by a large leap in crypto income.
The corporate reported $358 million in crypto transaction income within the quarter, the best contribution from digital-asset buying and selling to this point, Wall Avenue financial institution JPMorgan (JPM) stated in a analysis report Wednesday.
JPMorgan raised its worth goal for the inventory to $45 from $39, whereas sustaining its impartial score. Citi (C) raised its goal to $60 from $45 and stored its impartial score on the inventory. Dealer Bernstein greater than doubled it worth goal to $105 from $51 and stored an outperform score on the shares.
The inventory jumped 13% to $63.20 in early buying and selling Thursday following outcomes, launched after the market closed on Wednesdy.
Robinhood stated fourth-quarter income rose 115% from the earlier yr to $1.01 billion, beating Wall Avenue analysts’ estimate of $945.8 million, in response to FactSet information. Transaction-based earnings elevated 200% year-on-year, primarily attributable to a 700% rise in cryptocurrency income.
Crypto income usually contributes 10%-20% of whole income, JPMorgan famous. The 46% leap in whole cryptocurrency market cap within the interval and the rise in Robinhood notional volumes, which have been 393% larger quarter-on-quarter, fueled the income beat.
The corporate has huge plans for its crypto enterprise. “Administration seeks so as to add extra tokens, strengthen its pockets providing, add an order guide with alternate routing performance, combine Bitstamp and discover tokenization longer-term,” the report stated.
Robinhood has benefitted from favorable developments for the reason that begin of the yr, with “crypto market tailwinds and retail exercise remaining sturdy,” Citi stated.
If this constructive backdrop is maintained, the shares are prone to see help, however buyers ought to anticipate volatility. Whereas the financial institution has change into extra constructive on the corporate’s elementary outlook, it stated it most well-liked to attend for a “extra affordable entry level.”
Bernstein reiterated that Robinhood was the perfect thought within the dealer’s international digital property protection. It stated it anticipated continued momentum within the first quarter “pushed by crypto volatility and a sustained worth cycle.”
Learn extra: Robinhood’s Massive Earnings Beat May Bode Effectively for Coinbase
