Financial services platform Robinhood Markets (HOOD) will release its fiscal Q2 financials on August 7. Wall Street analysts expect the company to post earnings per share of $0.15 in Q2, up 400% from $0.03 in the prior-year quarter. Meanwhile, analysts expect revenues of $639.87 million, reflecting a 30% year-over-year increase, according to TipRanks’ data.
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In terms of HOOD’s earnings surprise history, we see that the company exceeded the consensus estimates in six out of the previous nine quarters.
Encouraging Website Traffic Trend
Investors can use TipRanks’ Website Traffic Tool to gain insights into a company’s upcoming earnings report. The tool offers information on how a company’s website domain performed over a specific time frame.
According to TipRanks’ Website Traffic tool, total estimated visits to robinhood.com grew by 126.38% year-over-year in Q2. This increase in visits suggests a growing interest in Robinhood’s services, potentially translating into more user sign-ups and engagement.
Insights from the TipRanks Bulls & Bears Tool
According to TipRanks’ Bulls Say, Bears Say tool, the bulls note that Robinhood’s acquisition of Pluto Capital boosts its platform with AI-driven strategies and real-time updates. Also, acquiring Bitstamp expands HOOD’s crypto offerings and global reach. In addition, they expect strong EPS growth due to increased net deposits, account growth, and significant operating leverage.
However, we should never forget about the bearish arguments. Bears say Robinhood faces regulatory risks with a “Wells Notice,” alleging Securities Exchange Act violations linked to its crypto business. Also, they note that a decline in daily trading activity, monthly active users, and slower account growth remain concerns.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 14.62% move in either direction.
Is Robinhood Markets a Good Stock to Buy?
Overall, the Street has a Hold consensus rating on HOOD, alongside an average price target of $22.79. However, analysts’ views on the stock are likely to change once the company reports its Q2 earnings tomorrow. The shares of the company have declined by 8% over the past three months.
Bottom Line
Analysts expect Robinhood Markets’s top and bottom lines to improve year-over-year in Q2, largely due to expanding opportunities in the crypto sector. Also, TipRanks’ website tool indicates higher traffic, indicating strong top-line performance in Q2. Nonetheless, concerns persist regarding the company’s rising regulatory risks and other challenges within the cryptocurrency industry.
