Robinhood Markets (HOOD) Earnings Preview: Analyst Estimates and Website Traffic Point to a Strong Third Quarter

Financial services platform Robinhood Markets (HOOD) will report its third-quarter financial results on October 30. Wall Street analysts expect the company to report earnings per share of $0.18, a significant improvement from the loss of $0.09 in the year-ago quarter. According to data from the TipRanks forecast site, revenue is expected to reach $653 million, up 39% year-over-year.

Looking at HOOD's earnings surprise story, we see that the company has beaten consensus estimates in seven of the trailing nine quarters.

Encouraging website traffic trend

In addition to encouraging analyst estimates, HOOD's website traffic data also points to strong results for the company in the upcoming third quarter. It should be noted that investors can use TipRanks' website traffic tool to gain insight into a company's upcoming earnings report. The tool provides information about how a company's website domain has performed over a period of time.

For Robinhood Markets, TipRanks' website traffic screener shows that traffic increased both sequentially and year-over-year in the third quarter. According to the tool, the number of visits to robinhood.com increased 121.12% compared to the same quarter last year and 3.49% sequentially.

Insights from the TipRanks Bulls & Bears Tool

TipRanks' Bulls Say, Bears Say tool provides insights into analysts' views on Robinhood as the company approaches its third-quarter earnings report. Bulls are positive on the company after it launched index options and futures, which are expected to attract more active traders. Additionally, they expect Robinhood to post positive GAAP earnings in FY24, driven by increased customer activity in the stock and crypto bull market and effective cost management. Additionally, analysts are bullish on HOOD's revenue growth, driven by initiatives to acquire more customers and increase user engagement across its offerings.

On the other hand, pessimistic arguments should not be overlooked. Bears warn that expected rate cuts from September 2024 could reduce net interest income, particularly from customers' idle money. Additionally, analysts are raising concerns about the long-term sustainability of HOOD's growth as incentive payments begin to fade.

Options traders are expecting a big move

Using TipRanks' options tool, we can see what options traders expect from the stock immediately after the earnings report. The expected earnings development is determined by calculating the “at-the-money” straddles of the options that are closest to expiry after the earnings announcement. If that sounds complicated, don't worry, the Options tool will do it for you.

In fact, it is currently said that options traders are expecting a 10.01% move in either direction.

Is Robinhood Markets a good stock to buy?

As for Wall Street, Robinhood stock has a consensus rating of Moderate Buy. Of the 17 analysts who cover the stock, nine recommend buying the stock, seven recommend holding and one analyst recommends selling the stock. Additionally, the average HOOD price target of $25.23 implies a downside potential of 9.51%. HOOD shares have gained 207% in the past year.

See more HOOD analyst ratings

Disclosure