Robinhood pass-through charge could boost EBITDA by 5%, says Mizuho

Mizuho analyst Dan Dolev estimates Robinhood’s recent implementation of a 3c pass-through charge per option trading contract could potentially boost 2024 adjusted EBITDA by 5% or more. The firm says fiscal 2024 adjusted EBITDA estimates have declined by $100M since just prior to the Q3 report, which bodes well for potential upward revisions as the expense line in question has hardly adjusted. The combination of strong execution, adoption of new products, expansion into the UK, and potential uplift to profits due to high operating leverage could continue Robinhood’s “strong momentum into 2024,” the analyst tells investors in a research note. The firm reiterates a Buy rating on the shares with a $15 price target.