Robinhood Sinks 12.8% on Mixed Q4 Results

Commission-free stock trading services provider Robinhood Markets, Inc. (NASDAQ: HOOD) has reported mixed results for the first quarter ended December 31, 2021.

Following the results, shares of the company declined 12.8% to close at $10.13 in yesterday’s extended trading session.

Revenue & Earnings

Robinhood reported quarterly net revenues of $363 million, up 14% from the previous year. The figure also surpassed the consensus estimate of $362.1 million. The primary driver of growth in net revenues for the company was the 12% year-over-year growth witnessed in transaction-based revenues, which stood at $264 million at end of the quarter.

Meanwhile, the company reported a loss per share of $0.49 during the quarter, wider than the consensus estimate of a loss per share of $0.45. HOOD had reported earnings of $0.02 in the same quarter last year.

Key Operating Metrics

The company’s monthly active users rose 48% year-over-year to 17.3 million, while assets under custody grew 56% from the previous year to $98 billion.

However, the average revenue per user for the company declined 39% from the year-ago period to $64.

Outlook

For the first quarter of 2022, Robinhood expects to post revenues of $340 million against the consensus estimate of $448.2 million.

Management Commentary

The CEO of Robinhood, Vlad Tenev, said, “We had a momentous year, nearly doubling the number of customers on the platform and making critical investments in our team and infrastructure to support growth. This year, we’ll expand our ecosystem of products that make Robinhood the best place to start investing and build wealth for the long term.”

Stock Rating

On January 27, Mizuho Securities analyst Dan Dolev assigned a Buy rating on the stock with a price target of $20, which implies upside potential of 72.3% from current levels.

According to the analyst, the company faces headwinds from the overall weakness in the payments sector as well as regulatory overhang. Yet, the company can see a rebound in the future.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Robinhood’s performance this quarter.

According to the tool, the Robinhood website recorded a 37.28% monthly decline in global visits in December, compared to the same period last year. Yet, year-to-date, the website traffic has increased 50.41%, compared to the previous year.

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