JMP says Robinhood acquisition of TradePMR ‘has strong strategic merits’

JMP Securities notes that Robinhood (HOOD) is entering $7T-plus complementary addressable market with announced acquisition of TradePMR. The firm believes the acquisition has strong strategic merits and is “not surprised.” JMP notes it has argued in research reports that the RIA custodial space represents a complementary adjacency for Robinhood, leveraging much of its existing infrastructure and capabilities, opening a new subset of the market that is growing with long-term secular tailwinds, and providing more capabilities for existing customers and new customers as Robinhood attempts to increasingly expand with wealthier customers. Robinhood did not provide financial details around the transaction, but the firm estimates modest accretion initially with a much more material long-term opportunity. JMP has an Outperform rating on Robinhood with a price target of $40 on the shares.