Results: Robinhood Markets, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Robinhood Markets, Inc. (NASDAQ:HOOD) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 3.3% to hit US$3.0b. Robinhood Markets also reported a statutory profit of US$1.56, which was an impressive 59% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Robinhood Markets

Taking into account the latest results, the consensus forecast from Robinhood Markets' 14 analysts is for revenues of US$3.71b in 2025. This reflects a substantial 26% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to fall 11% to US$1.42 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.35b and earnings per share (EPS) of US$1.09 in 2025. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 35% to US$68.59per share. 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$105 per share, while the most pessimistic values it at US$39.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Robinhood Markets' growth to accelerate, with the forecast 26% annualised growth to the end of 2025 ranking favourably alongside historical growth of 20% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.8% 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Robinhood Markets' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Robinhood Markets going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Robinhood Markets that we have uncovered.

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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.