Robinhood Markets (NASDAQ:HOOD) Shares Down 3.8% - Should You Sell?

Key Points

• Robinhood shares fell 3.8% to $81.35 in Thursday trading, while volume was 51% below its average.
• Business indicators were strong: customers traded 5.9 billion event contracts in October, up 136% year over year; October net deposits were about $15 billion, and margin balances rose 39% to $23 billion.
• Analysts maintain a Moderate Buy consensus with an average price target of $126.45. In its latest quarter, Robinhood beat EPS estimates ($0.60 versus $0.56) but slightly missed revenue estimates ($1.42 billion versus $1.44 billion).

Robinhood Markets, Inc. (NASDAQ:HOOD - Get Free Report)'s share price was down 3.8% during trading on Thursday. The company traded as low as $80.52 and last traded at $81.35. 12,893,820 shares changed hands during trading, a decline of 51% from the average session volume of 26,217,775 shares. The stock had previously closed at $84.58.

Latest Robinhood Markets News

Here's some of the latest news about HOOD:

• Positive Sentiment: Prediction-market activity was a standout: customers traded about 5.9 billion event contracts in October, up 136% year over year and 5% from September. Event contracts generated $173 million in third-quarter revenue, more than six times the year-earlier amount. Article: Robinhood's Prediction Market Bet Is Paying Off. Is the Stock a Buy?
• Positive Sentiment: Margin balances climbed 39% to $23 billion in October, potentially supporting recurring interest income. Article: Robinhood's Margin Balances Reach $23B: Tailwind for Interest Income?
• Positive Sentiment: Robinhood reportedly attracted about $15 billion in net deposits during October, a sign of continued customer asset inflows despite weaker crypto trading. Article: Robinhood reports about $15 billion in October net deposits as crypto volumes slide

Analyst Upgrades and Downgrades

Several equities research analysts have issued reports on HOOD shares. Deutsche Bank decreased their price target on shares of Robinhood Markets from $138.00 to $134.00 and set a "buy" rating on the stock in a research note on Tuesday, September 29th. Keefe, Bruyette & Woods upped their price objective on shares of Robinhood Markets from $100.00 to $115.00 and gave the company a "market perform" rating in a research note on Tuesday, September 29th. Needham & Company LLC decreased their target price on shares of Robinhood Markets from $126.00 to $116.00 and set a "buy" rating on the stock in a research report on Wednesday, October 28th. CICC Research boosted their price target on Robinhood Markets from $100.00 to $110.00 and gave the company an "outperform" rating in a report on Friday, July 31st. Finally, Scotiabank cut their price target on Robinhood Markets from $136.00 to $124.00 and set a "sector outperform" rating for the company in a report on Wednesday, October 28th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-eight have given a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $126.45.

Robinhood Markets Price Performance

The company's 50-day moving average is $104.70 and its 200-day moving average is $91.95. The company has a debt-to-equity ratio of 0.26, a current ratio of 1.24 and a quick ratio of 1.24. The firm has a market capitalization of $73.25 billion, a price-to-earnings ratio of 37.49, a PEG ratio of 1.81 and a beta of 2.56.

Robinhood Markets (NASDAQ:HOOD - Get Free Report) last issued its quarterly earnings results on Wednesday, October 28th. The company reported $0.60 EPS for the quarter, topping the consensus estimate of $0.56 by $0.04. The firm had revenue of $1.42 billion during the quarter, compared to analyst estimates of $1.44 billion. Robinhood Markets had a net margin of 39.04% and a return on equity of 21.49%. Robinhood Markets's revenue for the quarter was up 11.5% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.61 earnings per share. On average, research analysts expect that Robinhood Markets, Inc. will post 2.10 earnings per share for the current year.

Insider Activity at Robinhood Markets

In other news, CFO Shiv Verma sold 11,472 shares of the company's stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $110.42, for a total transaction of $1,266,738.24. Following the completion of the sale, the chief financial officer directly owned 56,858 shares in the company, valued at $6,278,260.36. This represents a 16.79% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Daniel Gallagher, Jr. sold 10,000 shares of the stock in a transaction on Tuesday, November 3rd. The stock was sold at an average price of $85.05, for a total value of $850,500.00. Following the completion of the transaction, the insider directly owned 489,943 shares in the company, valued at $41,669,652.15. This trade represents a 2.00% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 1,095,820 shares of company stock worth $128,775,816. 13.48% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Robinhood Markets

Large investors have recently modified their holdings of the company. Meeder Advisory Services Inc. increased its position in Robinhood Markets by 22.9% during the 3rd quarter. Meeder Advisory Services Inc. now owns 18,805 shares of the company's stock worth $2,116,000 after purchasing an additional 3,509 shares in the last quarter. First Trust Advisors LP raised its holdings in Robinhood Markets by 44.0% in the third quarter. First Trust Advisors LP now owns 377,310 shares of the company's stock valued at $42,447,000 after buying an additional 115,323 shares during the period. State Street Corp lifted its position in Robinhood Markets by 0.6% during the third quarter. State Street Corp now owns 34,865,341 shares of the company's stock valued at $3,922,351,000 after buying an additional 194,193 shares in the last quarter. Ilmarinen Mutual Pension Insurance Co lifted its position in Robinhood Markets by 195.9% during the third quarter. Ilmarinen Mutual Pension Insurance Co now owns 88,764 shares of the company's stock valued at $9,986,000 after buying an additional 58,764 shares in the last quarter. Finally, E Fund Management Hong Kong Co. Ltd. grew its stake in Robinhood Markets by 736.7% during the third quarter. E Fund Management Hong Kong Co. Ltd. now owns 9,998 shares of the company's stock worth $1,125,000 after buying an additional 8,803 shares during the period. 93.27% of the stock is currently owned by hedge funds and other institutional investors.

Robinhood Markets Company Profile

Robinhood Markets, Inc. operates a digital financial services platform that gives customers access to investing and financial products through its website and mobile app. Its offerings include trading in stocks, exchange-traded funds, options and cryptocurrencies, as well as retirement accounts and cash-management services. Founded in 2013 by Vlad Tenev and Baiju Bhatt, Robinhood built its business around making financial services more accessible through a mobile-first platform. The company is headquartered in Menlo Park, California, and serves customers in the United States and select international markets.

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