Earnings Beat: Robinhood Markets, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Robinhood Markets, Inc. (NASDAQ:HOOD) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. The company beat forecasts, with revenue of US$682m, some 6.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.21, 37% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Robinhood Markets

Taking into account the latest results, the consensus forecast from Robinhood Markets' 13 analysts is for revenues of US$2.58b in 2024. This reflects a notable 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 108% to US$0.68. In the lead-up to this report, the analysts had been modelling revenues of US$2.44b and earnings per share (EPS) of US$0.52 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable lift to earnings per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$22.97, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Robinhood Markets analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$17.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Robinhood Markets' rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Robinhood Markets is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Robinhood Markets following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$22.97, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Robinhood Markets going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Robinhood Markets' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.