Key Takeaways
- Robinhood shares jumped after reporting fourth-quarter earnings and income that got here in forward of analysts' expectations.
- Increased-than-anticipated curiosity revenue on buyer loans and a rebound in cryptocurrency and fairness buying and selling underpinned the quarterly outcomes.
- Robinhood shares face a key check close to $13 on the high trendline of a longtime buying and selling vary.
Robinhood Markets, Inc.
Supply: TradingView.com.
Shares in Robinhood Markets (HOOD) rose sharply in pre-market buying and selling Wednesday morning after the commission-free brokerage agency reported a shock revenue within the December quarter amid higher-than-expected curiosity revenue on buyer loans and a rebound in retail buying and selling exercise.
The net brokerage on the heart of the pandemic-era meme inventory buying and selling frenzy posted fourth-quarter adjusted earnings of three cents a share, whereas analysts had anticipated the corporate to report a 1 cent loss. Income of $471 million grew 24% year-over-year and in addition got here in forward of forecasts, which Wall Avenue had modeled at $455 million.
The corporate’s internet curiosity income within the interval grew 41% from a 12 months earlier, pushed by increased short-term borrowing charges, whereas its transaction-based income of $200 million improved 8% from the prior 12 months, benefiting from elevated buying and selling exercise throughout its cryptocurrency and fairness choices. The net dealer pointed to a 6% fourth-quarter sequential bounce in its month-to-month energetic person depend as an indication that retail merchants had been wading again into the markets.
Whereas the corporate didn’t present particular top- and bottom-line steerage, Robinhood Chief Monetary Officer Jason Warnick stated he anticipates a powerful 2024 primarily based on favorable income and macro developments. “Taking a look at revenues, with the present macro backdrop, we’re discovering for robust progress in 2024, pushed by continued 20-plus p.c internet deposit progress, growing gold adoption, double-digit positive aspects and buying and selling market share.” Warnick stated in a post-earnings name late Tuesday.
The corporate, which rolled out its buying and selling platform within the U.Okay. final November, additionally stated it stays centered on increasing its crypto buying and selling choices in Europe, noting they’re usually extra worthwhile than inventory trades.
HOOD has oscillated roughly inside a five-point buying and selling vary since October 2022, establishing clear help and resistance ranges on the chart. If the inventory has a post-earnings rally, monitor how the value responds to the vary’s high trendline round $13. A rejection of this necessary technical stage might give technique to a retest of the sample’s opposing aspect, whereas breakout on heavy quantity might mark the beginnings of a brand new uptrend.
Robinhood shares had been up 16.1% at $13.74 round 7:45 a.m. ET.
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