Robinhood Markets (NASDAQ:HOOD) capitalized on Bitcoin’s groundbreaking surge past $100,000 this week, with its shares continuing their meteoric rise in 2024, soaring 222% year-to-date.
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On top of BTC notching milestone highs, the uptick came in the wake of Robinhood’s investor day, where CEO Vlad Tenev and the team shared its 10-year vision for the company. The company aims to lead in active trading, expand wallet share among the next generation, and establish HOOD as a significant player in the global financial ecosystem.
Attending proceedings, it’s safe to say Deutsche Bank analyst Brian Bedell took a favorable view of the company’s trajectory. “Overall,” said the 5-star analyst, “we came away from the investor day increasingly optimistic on HOOD’s long-term revenue and earnings growth profile.”
The three-hour session included insights into how HOOD is accelerating its product roadmap. Plans include a broader launch of event contracts next year, along with progress in futures, index options, and HOOD’s advanced desktop trading platform, while the company also wants to expand its crypto offerings. At the same time, cost control remains a priority, with 90% of costs fixed and the platform’s efficiency paving the way for EBITDA margin expansion to over 50% in the coming years. Meanwhile, expense growth is expected to lag behind a “double-digit annual revenue growth profile.”
Those were not the only positives. Along with the Investor Day presentation, the company shared some of the operating data for November (ahead of next week’s full release). Trading volumes have been strong across all asset classes, but most impressively, says Bedell, were the crypto notional volumes, reckoned to be at over $30 billion. That’s more than five times the $5.6 billion reported in October. This suggests a Q4 ADV (average daily volume) of around $0.6 billion, well above Bedell’s previous forecast of $0.23 billion.
“While it’s still early to predict December volumes with only 3 trading days so far, we are seeing the crypto momentum continue, with data from Coinmarketcap showing ~25% increase in December ADV vs. November levels,” Bedell commented.
Reflecting his confidence, Bedell raised his price target on Robinhood from $36 to $42, while maintaining a Buy rating. Yet, with HOOD’s stellar rise, even the revised target suggests limited further upside — for now. (To watch Bedell’s track record, click here)
10 other analysts join Bedell in the bull camp, and with an additional 5 Holds and 1 Sell, the analyst consensus rates the stock a Moderate Buy. However, the average target tells a different story; at $38.67, the figure suggests shares will decline by 7% in the months ahead. It will be interesting to see whether analysts update their models or increase their price targets shortly. (See HOOD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
