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Robinhood (HOOD) Gears Up for Q1 Earnings: What to Expect
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Robinhood Markets, Inc. (HOOD - Free Report) is slated to report first-quarter 2024 results on May 8, after market close. Its earnings and revenues in the quarter are expected to have improved on a year-over-year basis.
In the last reported quarter, Robinhood posted earnings against the Zacks Consensus Estimate of loss. Results reflected an increase in total net revenues and lower operating expenses.
HOOD has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 166.64%.
The Zacks Consensus Estimate for HOOD’s first-quarter earnings is pegged at 5 cents per share, unchanged over the past seven days. The estimate indicates a 108.8% jump from the year-ago quarter’s reported number.
The consensus estimate for total sales is pegged at $534.5 million, suggesting a surge of 21.2% on a year-over-year basis.
Other Key Estimates for Q1
During the first quarter, client activity was robust, with the major indexes touching all-time highs. This is expected to have supported Robinhood’s transaction revenues. The Zacks Consensus Estimate for transaction-based revenues is pegged at $239.3 million, indicating a 15.6% rise from the prior-year reported number. This is likely to have been a result of higher options, equity and cryptocurrencies transaction revenues.
The consensus estimate for options transaction revenues stands at $133.7 million, suggesting an almost 1% increase. Further, the Zacks Consensus Estimate equity and cryptocurrencies transaction revenues are $24.7 million and $34.7 million, respectively. Equity transaction revenues are projected to grow 16.9%, while cryptocurrencies transaction revenues are estimated to jump 64.7% on a year-over-year basis.
Additionally, higher interest rates are expected to have immensely supported Robinhood’s net interest income (NII) in the to-be-reported quarter. The Federal Reserve kept the interest rates unchanged at a 23-year high of 5.25-5.5% during the second quarter. Thus, the consensus estimate for NII is $259.4 million, implying a 24.7% surge.
The Zacks Consensus Estimate for other revenues stands at $33 million, suggesting a 26.8% jump from the prior-year quarter.
On the cost front, total operating expenses are anticipated to remain elevated as the company invests in key areas to enhance platform capabilities, drive product innovation, improve customer support and build upon regulatory and compliance functions.
During the to-be-reported quarter, HOOD announced expansion into the U.K. markets. Also, the company has been venturing beyond trading with an aim to become less dependent on markets to generate revenues. These initiatives are expected to have resulted in a rise in expenses.
Earnings Whispers
According to our quantitative model, the chances of Robinhood beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Robinhood has an Earnings ESP of +25.93%.
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2024 earnings of $5.08 per share missed the Zacks Consensus Estimate of $6.81. The bottom line reflects a 33.2% decline from the prior-year quarter. These figures include certain non-recurring items.
CACC’s results were primarily hurt by an increase in operating expenses and higher provisions. Nevertheless, improvements in GAAP revenues and consumer loan assignment volumes were positives.
LendingTree, Inc.’s (TREE - Free Report) first-quarter 2024 adjusted net income per share of 70 cents beat the Zacks Consensus Estimate of 46 cents. The reported figure compares favorably with 25 cents reported in the prior-year quarter.
TREE’s results were aided by lower costs, while a decline in revenues was a spoilsport.
Image: Bigstock
Robinhood (HOOD) Gears Up for Q1 Earnings: What to Expect
Robinhood Markets, Inc. (HOOD - Free Report) is slated to report first-quarter 2024 results on May 8, after market close. Its earnings and revenues in the quarter are expected to have improved on a year-over-year basis.
In the last reported quarter, Robinhood posted earnings against the Zacks Consensus Estimate of loss. Results reflected an increase in total net revenues and lower operating expenses.
HOOD has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 166.64%.
Robinhood Markets, Inc. Price and EPS Surprise
Robinhood Markets, Inc. price-eps-surprise | Robinhood Markets, Inc. Quote
Earnings & Sales Projections for Q1
The Zacks Consensus Estimate for HOOD’s first-quarter earnings is pegged at 5 cents per share, unchanged over the past seven days. The estimate indicates a 108.8% jump from the year-ago quarter’s reported number.
The consensus estimate for total sales is pegged at $534.5 million, suggesting a surge of 21.2% on a year-over-year basis.
Other Key Estimates for Q1
During the first quarter, client activity was robust, with the major indexes touching all-time highs. This is expected to have supported Robinhood’s transaction revenues. The Zacks Consensus Estimate for transaction-based revenues is pegged at $239.3 million, indicating a 15.6% rise from the prior-year reported number. This is likely to have been a result of higher options, equity and cryptocurrencies transaction revenues.
The consensus estimate for options transaction revenues stands at $133.7 million, suggesting an almost 1% increase. Further, the Zacks Consensus Estimate equity and cryptocurrencies transaction revenues are $24.7 million and $34.7 million, respectively. Equity transaction revenues are projected to grow 16.9%, while cryptocurrencies transaction revenues are estimated to jump 64.7% on a year-over-year basis.
Additionally, higher interest rates are expected to have immensely supported Robinhood’s net interest income (NII) in the to-be-reported quarter. The Federal Reserve kept the interest rates unchanged at a 23-year high of 5.25-5.5% during the second quarter. Thus, the consensus estimate for NII is $259.4 million, implying a 24.7% surge.
The Zacks Consensus Estimate for other revenues stands at $33 million, suggesting a 26.8% jump from the prior-year quarter.
On the cost front, total operating expenses are anticipated to remain elevated as the company invests in key areas to enhance platform capabilities, drive product innovation, improve customer support and build upon regulatory and compliance functions.
During the to-be-reported quarter, HOOD announced expansion into the U.K. markets. Also, the company has been venturing beyond trading with an aim to become less dependent on markets to generate revenues. These initiatives are expected to have resulted in a rise in expenses.
Earnings Whispers
According to our quantitative model, the chances of Robinhood beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Robinhood has an Earnings ESP of +25.93%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2024 earnings of $5.08 per share missed the Zacks Consensus Estimate of $6.81. The bottom line reflects a 33.2% decline from the prior-year quarter. These figures include certain non-recurring items.
CACC’s results were primarily hurt by an increase in operating expenses and higher provisions. Nevertheless, improvements in GAAP revenues and consumer loan assignment volumes were positives.
LendingTree, Inc.’s (TREE - Free Report) first-quarter 2024 adjusted net income per share of 70 cents beat the Zacks Consensus Estimate of 46 cents. The reported figure compares favorably with 25 cents reported in the prior-year quarter.
TREE’s results were aided by lower costs, while a decline in revenues was a spoilsport.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.