Piper Sandler analyst Patrick Moley stated the risky buying and selling atmosphere drives third-quarter outperformance for change and buying and selling corporations, resulting in a robust backdrop for retail brokers.
Moley maintained Robinhood Markets Inc HOOD with an Chubby score and a $27 value goal.
Regardless of Web Curiosity Earnings headwinds from the decrease charge atmosphere, Moley famous a number of distinctive near-term alternatives for Robinhood Markets that ought to assist drive continued earnings progress.
On October 16, Robinhood Markets is internet hosting an lively dealer summit in Miami, Florida. The analyst expects the corporate to introduce its new web-based buying and selling platform and reveal a launch date for the roll-out of index choices and futures buying and selling to its 24 million prospects.
He expects these new merchandise to extend buying and selling velocity amongst Robinhood Markets’ current buyer base and index choices and futures buying and selling to be priced decrease than competitor platforms. Moley famous that this could drive market share positive aspects for Robinhood Markets within the excessive Common Income Per Consumer (ARPU), web-based lively dealer phase that accounts for practically 50% of the retail market the place Robinhood Markets has zero publicity at present.
Moley expects the fiscal third quarter of 2024 to be the second strongest quarter in Robinhood Markets’ historical past by way of each revenues and adjusted EBITDA. The analyst expects complete revenues to extend 43% year-on-year (
Inside transaction-based revenues, he expects Robinhood Markets’ crypto buying and selling income to extend by 184% Y/Y (-19% Q/Q), pushed by continued substantial buying and selling volumes and internet deposit progress.
Moley expects larger charges for a lot of the quarter and better buyer balances to push a 20% Y/Y (+6% Q/Q) improve in NII. The analyst’s adjusted EPS estimate of $0.17 within the third quarter would characterize the second-highest quarterly EPS for Robinhood Markets for the reason that fiscal second quarter of 2020.
Moley reiterated a Impartial score on Coinbase World Inc COIN with a value goal of $245.
The analyst expects complete revenues to extend by 88% Y/Y (-12% Q/Q) to $1.27 billion within the third quarter. The Y/Y improve is pushed by a mix of upper volumes driving larger Transaction revenues, larger crypto costs driving larger blockchain reward revenues, and better rates of interest & larger USDC market cap driving larger NII.
Moley expects transaction revenues within the third quarter to extend 118% Y/Y (-19% Q/Q) as a ~158% Y/Y improve in buying and selling volumes is barely modestly offset by an estimated ~2.5bp lower within the blended charge seize.
The analyst forecasted an adjusted EBITDA of $782 million within the third quarter, up from $596 million within the second quarter.
Worth Actions: HOOD inventory is up 8.25% at $25.25 ultimately test Tuesday. COIN is down 1.72% at $166.02.
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