Latest news with #HOOD
Globe and Mail
a day ago
- Business
- Globe and Mail
Solid Transaction-Based Revenues to Drive HOOD's Q2 Earnings
Robinhood Markets' HOOD transaction-based revenues (comprising more than 60% of total net revenues) are expected to have been impressive in the second quarter of 2025. The company is scheduled to announce its quarterly numbers tomorrow after market close. During the second quarter, trading volume and client activity remained robust as market volatility was sparked by President Trump's 'Liberation Day' tariff proposals and the resulting uncertainty. As the quarter advanced, increased clarity on trade policy helped propel equity markets to record highs. Additionally, trading momentum was strong across other asset classes, including cryptocurrencies, supported by the introduction of new legislation favoring digital assets. These are likely to have supported Robinhood's transaction-based revenues in the to-be-reported quarter. The Zacks Consensus Estimate for the metric is pegged at $508.4 million, indicating a 55.5% surge from the prior-year quarter. The solid performance is likely to have been driven by higher options, equity and cryptocurrencies transaction revenues during the second quarter. The consensus estimate for Robinhood's options transaction revenues is $252.2 million, suggesting 38.6% growth. Further, the Zacks Consensus Estimate for equity and cryptocurrencies transaction revenues is pegged at $68.1 million and $156.1 million, respectively. Equity transaction revenues are projected to surge 70.2%, while cryptocurrencies transaction revenues are estimated to jump 93.2% year over year. HOOD's Q2 Earnings & Revenue Growth Expectations The Zacks Consensus Estimate for second-quarter earnings is pegged at 31 cents, which has remained unchanged over the past seven days. The figure suggests a jump of 47.6% from the year-ago reported number. The consensus estimate for sales of $915.2 million indicates a 34.2% year-over-year rise. Click here to know about the other factors that are likely to have influenced HOOD's overall performance. How Robinhood's Peers Fared in Q2 Two of Robinhood's close peers – Interactive BrokersIBKR and Charles SchwabSCHW – announced results on July 17 and July 18, respectively. Interactive Brokers' second-quarter 2025 adjusted earnings per share of $1.51 surpassed the Zacks Consensus Estimate of $1.46. The bottom line grew 15.9% from the prior-year quarter. Results primarily benefited from an increase in revenues as trading volume, customer accounts and daily average revenue trades increased in the quarter. As such, Interactive Brokers recorded a 27.1% jump in commissions. Similarly, Schwab's second-quarter 2025 adjusted earnings of $1.14 per share outpaced the Zacks Consensus Estimate of $1.09 and surged 56% year over year. The solid performance of the asset management business and higher net interest revenues supported the results. Also, trading revenues, which soared 22.5% year over year, drove Schwab's quarterly performance. Our Take on Robinhood's Q2 Performance Apart from impressive transaction-based revenues, Robinhood is expected to have witnessed higher interest income as interest rates were relatively high in the second quarter. Hence, this will also support this Zacks Rank #1 (Strong Buy) company's second-quarter numbers. You can see the complete list of today's Zacks #1 Rank stocks here. On the other hand, HOOD's operating expenses are likely to have stayed high due to ongoing investments in platform upgrades, product innovation, customer support and regulatory compliance. Nonetheless, Robinhood's shares have had a remarkable run on the bourses since the beginning of the year. This year, the stock soared a whopping 186.6%, outperforming the industry's growth of 23.6%. Image Source: Zacks Investment Research Higher. Faster. Sooner. Buy These Stocks Now A small number of stocks are primed for a breakout, and you have a chance to get in before they take off. At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We've combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month. You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
a day ago
- Business
- Globe and Mail
Regulatory Tailwinds Likely to Drive Cryptocurrency Momentum: 5 Picks
The cryptocurrency market has been witnessing a strong rally this month. Bitcoin (BTC), the largest cryptocurrency globally, touched the all-time high of 123,091.61 on July 14. Thereafter, it hovers around 118,000. Ethereum (ETH) rebounded sharply and is up more than 57% in the past month. Positive developments on the global tariff and trade front and the evaporation of a near-term recession fear in the U.S. economy boosted cryptocurrencies. Meanwhile, this space gathers momentum predominantly through favorable regulatory developments. At this stage, it should be fruitful to invest in crypto-centric stocks with a favorable Zacks Rank for near-term gain. Five such stocks are: Robinhood Markets Inc. HOOD, Interactive Brokers Group Inc. IBKR, IREN Ltd. IREN, Visa Inc. V and Cipher Mining Inc. CIFR. Regulatory Tailwinds On July 18, President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) seeking to regulate the stablecoin market of the nation. Stablecoins are digital assets that are built to maintain a stable value relative to a 'stable' asset like the US dollar. Giant retailers such as Walmart and Amazon are considering launching their own stablecoins to reduce dependence on traditional payment networks like plastic money. Two major cryptocurrency-related regulations still pending are The CLARITY Act and The Anti-CBDC Surveillance State Act. The CLARITY Act aims to define when crypto is a commodity or a security. The CLARITY Act would establish a regulatory framework for digital assets other than stablecoins. This will allow crypto exchanges to register with the Commodity Futures Trading Commission thereby reducing the Securities and Exchange Commission's regulation of digital currencies. The Anti-CBDC Surveillance State Act aims to prevent the Federal Reserve from issuing a Central Bank Digital Currency (CBDC) directly to individuals or indirectly through intermediaries. The bill also prohibits the Federal Reserve from developing or issuing a CBDC without explicit authorization from Congress. The chart below shows the price performance of our five picks in the past month. Robinhood Markets Inc. Robinhood Markets operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies using its Robinhood Crypto platform. Given the higher retail participation in markets, HOOD's trading revenues are expected to improve in the near future. Buyouts and product diversification efforts to become a leader in the active trader market will likely bolster its financials. HOOD's vertical integration will likely enhance its product velocity. Further, a robust liquidity position will help HOOD in sustainable share repurchases. HOOD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Robinhood Markets has an expected revenue and earnings growth rate of 26.8% and 20.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.5% over the last 30 days. Interactive Brokers Group Inc. Zacks Rank #1 Interactive Brokers Group is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR's commodities futures trading desk also offers customers a chance to trade cryptocurrency futures. IBKR's efforts to develop proprietary software, lower compensation expenses relative to net revenues, enhance its emerging market customers and global footprint, along with relatively high rates, are expected to continue aiding revenues. IBKR's initiatives to expand its product suite and the reach of its services will support financials. Interactive Brokers Group has an expected revenue and earnings growth rate of 7.4% and 9.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.7% in the last 30 days. IREN Ltd. IREN is a Bitcoin mining company. IREN builds, owns and operates data center infrastructure with a focus on entry into regions where it can access abundant and/or under-utilized renewable energy to power its operations. IREN currently carries a Zacks Rank #2 (Buy). IREN has an expected revenue and earnings growth rate of 86.1% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 17.3% over the last 30 days. Visa Inc. Zacks Rank #2 Visa's ongoing shift to digital payments is advantageous for Visa, with strong domestic volumes supporting its overall performance. V is taking a significant step toward modernizing cross-border money movement. In a move aimed at enhancing the efficiency of global transactions, V is expanding its stablecoin settlement capabilities to the high-performing Solana blockchain. This expansion of V includes collaboration with prominent merchant acquirers Worldpay and Nuvei, marking a pivotal development in the world of digital payments. Visa has an expected revenue and earnings growth rate of 10.3% and 13.1%, respectively, for the current year (ending September 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. Cipher Mining Inc. Zacks Rank #2 Cipher Mining is an industrial-scale bitcoin mining company. CIFR also offers high-performance computing (HPC) services, such as artificial intelligence. CIFR continues to develop its pipeline of power capacity at high-quality data center sites, either for bitcoin mining or HPC. Cipher Mining has an expected revenue and earnings growth rate of 72% and -150%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 18.6% in the last 60 days. Higher. Faster. Sooner. Buy These Stocks Now A small number of stocks are primed for a breakout, and you have a chance to get in before they take off. At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We've combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month. You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days. Download the report free now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Visa Inc. (V): Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report Cipher Mining Inc. (CIFR): Free Stock Analysis Report IREN Limited (IREN): Free Stock Analysis Report
Yahoo
4 days ago
- Business
- Yahoo
Should You Buy Robinhood Markets While It's Below $110?
Key Points Robinhood has a paid subscriber base of 3.2 million users. The online brokerage generated $927 million in net revenue in Q1 2025. The company has $2.2 billion in net cash on its balance sheet. 10 stocks we like better than Robinhood Markets › In January, I highlighted Robinhood Markets (NASDAQ: HOOD) as a stock to buy for long-term investors, despite doubts about whether the company could do more than disrupt the brokerage industry. Back then, it was trading around $40 per share, and many still questioned its staying power. Fast-forward six months -- not yet the long term -- and the stock has surged past $100, lifting its market capitalization to nearly $90 billion, resulting in a remarkable 173% increase year to date. With shares now near all-time highs, let's dive into what's driving this momentum, what lies ahead, what could go wrong, and whether the stock still makes sense for investors. Here's how Robinhood is growing so quickly Robinhood delivered standout Q1 2025 results, with revenue soaring 50% year over year to $927 million. The biggest driver was a 77% surge in transaction-based revenue, which climbed to $583 million. Robinhood's second-largest revenue stream, net interest income, rose 14% to $290 million, fueled by a larger base of interest-earning assets and a continued ramp-up in securities lending. Moreover, the brokerage gained $2 billion in net deposits in the quarter to a record $18 billion, and Robinhood Gold, the company's subscription offering that costs $5 per month or $50 annually, saw subscribers nearly double year over year from 1.7 million to 3.2 million. Robinhood CEO Vlad Tenev summed up the growth on the Q1 earnings call: "Customers are not only trading more with us, but they're entrusting us with more of their assets." As for how its growth is translating to the bottom line, Robinhood produced $336 million in net income, an impressive increase of 114% year over year. Can Robinhood continue to grow? As for where Robinhood goes from here, the company acquired TradePMR, a trading platform designed for independent registered investment advisors, for $300 million in cash and stock. The deal, which allows Robinhood entry into the wealth management sector, is another step in diversifying its business. Additionally, Robinhood recently closed on its $200 million acquisition of Bitstamp, the world's longest-running cryptocurrency exchange, to broaden its addressable market outside of the U.S. "Our 10-year arc, our long-term arc, is to build the No. 1 global financial ecosystem," Tenev added on Robinhood's most recent earnings call. "That means expanding our business from retail only, which it pretty much is now, to also serving businesses and institutions, and also expanding from primarily U.S. to being a full global platform serving customers everywhere." Notably, Robinhood has nine different businesses that each generate at least $100 million in annualized revenue, nearly twice as many as a couple of years ago. Tenev also mentioned other opportunities for growth, including building out 24-hour trading, 401(k) administration for businesses, and employee stock plan administration for public companies. Here's what could go wrong for Robinhood As of now, considering Robinhood's high growth, profitability, and clean balance sheet with $2.2 billion in net cash, you'd be hard pressed to find any problems with its business. However, the stock can be a different story. For high-growth companies like Robinhood, their stocks typically have two issues: share dilution and valuation. Since its IPO, Robinhood's share count has risen by 5.6%, which dilutes investors' ownership stake. The good news is that management is addressing the concern, lowering share-based compensation from $871 million in 2023 to $304 million in 2024. Additionally, management recently increased its share repurchase authorization from $1 billion to $1.5 billion, or nearly all of its $1.6 billion in trailing 12 months of net income. According to management, the buybacks will decrease its share count by approximately 1% in 2025. As for the stock's valuation, Robinhood now trades at roughly 67 times forward earnings estimates, near an all-time high. That's a steep price tag for a company still pouring resources into growth and customer acquisition. While Robinhood's roadmap includes promising new products that could eventually justify the valuation, many remain early stage ideas with no guarantee they will turn into meaningful profits. Is Robinhood stock a buy? Robinhood continues to prove its doubters wrong. With 75% of its 25 million funded accounts coming from members of the millennial and Gen Z generations, the platform is well-positioned for long-term growth as those users get older and build wealth. Still, with shares near all-time highs and valuation stretched, now may not be the best entry point. Long-term investors who believe in the vision might consider holding or dollar-cost averaging, i.e., investing a set amount at predetermined times. But chasing the stock after its massive run comes with real risk for future returns. Should you buy stock in Robinhood Markets right now? Before you buy stock in Robinhood Markets, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Robinhood Markets wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,942!* Now, it's worth noting Stock Advisor's total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Collin Brantmeyer has positions in Robinhood Markets. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Buy Robinhood Markets While It's Below $110? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Robinhood's Lofy Valuation: A Vote of Confidence or Cautionary Tale?
Robinhood Markets' HOOD shares are trading at a massive premium to the industry. At present, the company has a forward price/earnings (P/E) of 67.23X compared with the industry average of 14.81X. Price-to-Earnings F12M Image Source: Zacks Investment Research Further, HOOD stock looks expensive compared with its peers -- Charles Schwab SCHW and Interactive Brokers IBKR. Schwab and Interactive Brokers have a forward P/E of 19.40X and 32.26X, the stock trading at a premium, this has raised a question in everyone's mind: whether the valuation is rooted in optimism over its long-term growth or detached from its current fundamentals. With expanding product offerings and a growing user base, is the market right to bet big on HOOD? Let's find out. Robinhood: A Global Innovative Player Robinhood has evolved significantly since the meme stock frenzy of early 2021, emerging as a serious competitor to established online brokerage players like Interactive Brokers and Schwab. The company intends to become a one-stop shop for building generational wealth align with its goal of becoming an international player, the company has unveiled several products and services, including tokenized U.S. stock and exchange-traded fund (ETF) for European Union (EU) investors and an advanced desktop platform, Robinhood Legend, in the U.K., following its launch in the United States in October 2024. Moreover, in May, HOOD announced an agreement to acquire Canada-based WonderFi Technologies Inc. Besides granting regulatory footing in Canada, the transaction strengthens the company's position in a rapidly growing crypto market. These efforts align with Robinhood's ambition to become a global player as the company looks to expand its presence beyond the Americas and Europe into the Asia-Pacific region. During its first Investor Day conference in December 2024, CEO Vlad Tenev mentioned that the company will set up a new office in Singapore in 2025, which will serve as HOOD's headquarters for the company is likely to launch digital asset trading in Singapore soon, having completed the acquisition of Luxembourg-based Bitstamp, a globally recognized cryptocurrency exchange. The deal provides Robinhood with the requisite regulatory approvals, positioning the company to enter Singapore's expanding digital assets market. HOOD's Business Diversifying Efforts Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income. In 2024, this came down to nearly 56%.Other initiatives by Robinhood reflect its ambition to become a comprehensive financial services provider. In March, the company launched Robinhood Strategies, Robinhood Banking and Robinhood Cortex, a suite of new features, to boost the wealth management offerings for its Robinhood Gold members. Further, it launched the prediction markets hub, allowing customers to trade on the outcomes of several major global events. Initially, the hub will be available across the United States through KalshiEX LLC, a Commodity Futures Trading Commission-regulated contracts gained traction when Robinhood launched them in October 2024, just before the U.S. Presidential elections. Similarly, Interactive Brokers has been actively expanding its event contract offerings to capitalize on rising demand. In April, it launched prediction markets in Canada. Like HOOD, it first introduced event contracts in October 2024, starting with the U.S. election in February, Robinhood acquired Gainesville, FL-based TradePMR, a custodial (having $40 billion in assets under administration) and portfolio management platform specializing in services for Registered Investment Advisors. The company gained immediate credibility and resources to cater to wealthier investors seeking advisory solutions. By foraying into the advisory space, the company now directly competes with established players like Schwab and Fidelity in July 2024, Robinhood acquired Pluto Capital Inc. With the integration of Pluto's advanced capabilities, HOOD is set to revolutionize the investment experience for its users. Also, as part of a diversification effort, the company launched a credit card (expanding into the consumer finance space). Cryptocurrencies: A Vital Tailwind for Robinhood Robinhood's focus on the cryptocurrency space, through increased tokenization, enhanced platform capabilities and expansion into EU markets, is expected to drive greater cost efficiency and revenue growth. The company is actively pursuing Markets in Crypto-Assets Regulation (MiCA) licenses, which would enable it to offer crypto services across the European Economic Area, expanding its reach to 27 acquisition of Bitstamp and the impending WonderFi deal align with this broader strategy. Bitstamp's core spot exchange, offering more than 85 tradable assets, will significantly strengthen Robinhood's crypto product suite. Meanwhile, WonderFi brings two of Canada's leading regulated crypto platforms — Bitbuy and Coinsquare — with more than C$2.1 billion in assets under custody. These will enable Robinhood to provide trading, staking and custody the platform diversifies and enhances its offerings, Robinhood's cryptocurrency revenues are well-positioned for growth, supported by increasing investor interest in crypto as both a return-generating and diversification tool. Currently, Robinhood supports many major cryptocurrencies — Bitcoin, Ethereum, Dogecoin, Litecoin, Solana and Toncoin. HOOD Rewards Shareholders In 2024, Robinhood announced a share buyback plan (for the first time) to repurchase up to $1 billion of its outstanding common stock. In April, the company increased its existing authorization by $500 million to $1.5 billion. As of April 30, 2025, approximately $833 million worth of shares remained available for repurchase. HOOD plans to complete the remainder of its total authorization over roughly the next two is on solid ground, with significant cash reserves. As of March 31, 2025, it reported cash and cash equivalents of $4.42 billion. Litigation & Probes Surrounding Robinhood Robinhood operates in a highly regulated industry and is subject to the scrutiny of numerous authorities. This exposes the company to regulatory risks, resulting in hefty fines and restrictions that may affect its growth this month, Florida Attorney General James Uthmeier initiated an investigation into Robinhood Crypto, LLC, a subsidiary of Robinhood, for alleged violation of the state's Deceptive and Unfair Practices Act by falsely promoting its platform as the most affordable one to buy crypto. The company is also under investigation by Lithuania's central bank, its lead regulator in the EU, regarding its newly launched tokenized equity products. Moreover, between 2023 and 2025, Robinhood faced multiple regulatory setbacks, including a $45 million fine in January 2025 for securities law violations and a $26 million FINRA settlement in March over identity verification failures. It also paid $3.9 million in 2024 for crypto withdrawal issues and $7.5 million in 2023 after losing a Massachusetts court case tied to product oversight and marketing regulatory actions highlight ongoing compliance and oversight challenges faced by Robinhood. HOOD's Earnings Estimates & Price Performance Over the past month, the Zacks Consensus Estimate for 2025 and 2026 has been revised upward to $1.31 and $1.68, respectively. This reflects a bullish sentiment among analysts. Estimate Revision Trend Image Source: Zacks Investment Research The Zacks Consensus Estimate for HOOD's earnings implies 20.2% and 28.1% year-over-year growth in 2025 and 2026, respectively. Further, Robinhood shares have surged an impressive 173.65% this year, driven by rising investor confidence in its strategic growth initiatives and a more favorable regulatory outlook for cryptocurrencies. The rally also reflects broader optimism around the mainstream adoption of digital assets and Robinhood's positioning to capitalize on that such, HOOD stock has outperformed the industry's rally of 22.4%. Meanwhile, shares of Schwab gained 30.4%, while Interactive Brokers jumped 46.5%. HOOD's YTD Price Performance Image Source: Zacks Investment Research Making Sense of Robinhood's Premium Valuation Robinhood's premium valuation can be justified by its rapid transformation into a diversified, global financial services platform. The company has moved well beyond its roots in retail brokerage, expanding into wealth management, advisory services and consumer finance. Its growing international footprint has been bolstered by tapping into high-growth crypto and fintech markets. Robinhood's evolving product suite caters to a younger, tech-savvy investor base, while its declining reliance on transaction-based revenue reflects increasing business maturity. Solid liquidity, a $1.5 billion buyback program and robust user growth amid rising digital asset adoption further reinforce investor confidence. Although regulatory scrutiny remains a headwind, Robinhood's innovation-driven growth strategy and expanding global presence suggest that its lofty valuation reflects more than just hype; it's a bet on the company's long-term potential to reshape modern present, Robinhood sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
5 days ago
- Business
- Globe and Mail
Robinhood's Lofy Valuation: A Vote of Confidence or Cautionary Tale?
Robinhood Markets ' HOOD shares are trading at a massive premium to the industry. At present, the company has a forward price/earnings (P/E) of 67.23X compared with the industry average of 14.81X. Further, HOOD stock looks expensive compared with its peers -- Charles Schwab SCHW and Interactive Brokers IBKR. Schwab and Interactive Brokers have a forward P/E of 19.40X and 32.26X, respectively. With the stock trading at a premium, this has raised a question in everyone's mind: whether the valuation is rooted in optimism over its long-term growth or detached from its current fundamentals. With expanding product offerings and a growing user base, is the market right to bet big on HOOD? Let's find out. Robinhood: A Global Innovative Player Robinhood has evolved significantly since the meme stock frenzy of early 2021, emerging as a serious competitor to established online brokerage players like Interactive Brokers and Schwab. The company intends to become a one-stop shop for building generational wealth globally. To align with its goal of becoming an international player, the company has unveiled several products and services, including tokenized U.S. stock and exchange-traded fund (ETF) for European Union (EU) investors and an advanced desktop platform, Robinhood Legend, in the U.K., following its launch in the United States in October 2024. Moreover, in May, HOOD announced an agreement to acquire Canada-based WonderFi Technologies Inc. Besides granting regulatory footing in Canada, the transaction strengthens the company's position in a rapidly growing crypto market. These efforts align with Robinhood's ambition to become a global player as the company looks to expand its presence beyond the Americas and Europe into the Asia-Pacific region. During its first Investor Day conference in December 2024, CEO Vlad Tenev mentioned that the company will set up a new office in Singapore in 2025, which will serve as HOOD's headquarters for the region. The company is likely to launch digital asset trading in Singapore soon, having completed the acquisition of Luxembourg-based Bitstamp, a globally recognized cryptocurrency exchange. The deal provides Robinhood with the requisite regulatory approvals, positioning the company to enter Singapore's expanding digital assets market. HOOD's Business Diversifying Efforts Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income. In 2024, this came down to nearly 56%. Other initiatives by Robinhood reflect its ambition to become a comprehensive financial services provider. In March, the company launched Robinhood Strategies, Robinhood Banking and Robinhood Cortex, a suite of new features, to boost the wealth management offerings for its Robinhood Gold members. Further, it launched the prediction markets hub, allowing customers to trade on the outcomes of several major global events. Initially, the hub will be available across the United States through KalshiEX LLC, a Commodity Futures Trading Commission-regulated exchange. Event contracts gained traction when Robinhood launched them in October 2024, just before the U.S. Presidential elections. Similarly, Interactive Brokers has been actively expanding its event contract offerings to capitalize on rising demand. In April, it launched prediction markets in Canada. Like HOOD, it first introduced event contracts in October 2024, starting with the U.S. election results. Further, in February, Robinhood acquired Gainesville, FL-based TradePMR, a custodial (having $40 billion in assets under administration) and portfolio management platform specializing in services for Registered Investment Advisors. The company gained immediate credibility and resources to cater to wealthier investors seeking advisory solutions. By foraying into the advisory space, the company now directly competes with established players like Schwab and Fidelity Investments. Moreover, in July 2024, Robinhood acquired Pluto Capital Inc. With the integration of Pluto's advanced capabilities, HOOD is set to revolutionize the investment experience for its users. Also, as part of a diversification effort, the company launched a credit card (expanding into the consumer finance space). Cryptocurrencies: A Vital Tailwind for Robinhood Robinhood's focus on the cryptocurrency space, through increased tokenization, enhanced platform capabilities and expansion into EU markets, is expected to drive greater cost efficiency and revenue growth. The company is actively pursuing Markets in Crypto-Assets Regulation (MiCA) licenses, which would enable it to offer crypto services across the European Economic Area, expanding its reach to 27 countries. The acquisition of Bitstamp and the impending WonderFi deal align with this broader strategy. Bitstamp's core spot exchange, offering more than 85 tradable assets, will significantly strengthen Robinhood's crypto product suite. Meanwhile, WonderFi brings two of Canada's leading regulated crypto platforms — Bitbuy and Coinsquare — with more than C$2.1 billion in assets under custody. These will enable Robinhood to provide trading, staking and custody services. As the platform diversifies and enhances its offerings, Robinhood's cryptocurrency revenues are well-positioned for growth, supported by increasing investor interest in crypto as both a return-generating and diversification tool. Currently, Robinhood supports many major cryptocurrencies — Bitcoin, Ethereum, Dogecoin, Litecoin, Solana and Toncoin. HOOD Rewards Shareholders In 2024, Robinhood announced a share buyback plan (for the first time) to repurchase up to $1 billion of its outstanding common stock. In April, the company increased its existing authorization by $500 million to $1.5 billion. As of April 30, 2025, approximately $833 million worth of shares remained available for repurchase. HOOD plans to complete the remainder of its total authorization over roughly the next two years. Robinhood is on solid ground, with significant cash reserves. As of March 31, 2025, it reported cash and cash equivalents of $4.42 billion. Litigation & Probes Surrounding Robinhood Robinhood operates in a highly regulated industry and is subject to the scrutiny of numerous authorities. This exposes the company to regulatory risks, resulting in hefty fines and restrictions that may affect its growth prospects. Earlier this month, Florida Attorney General James Uthmeier initiated an investigation into Robinhood Crypto, LLC, a subsidiary of Robinhood, for alleged violation of the state's Deceptive and Unfair Practices Act by falsely promoting its platform as the most affordable one to buy crypto. The company is also under investigation by Lithuania's central bank, its lead regulator in the EU, regarding its newly launched tokenized equity products. Moreover, between 2023 and 2025, Robinhood faced multiple regulatory setbacks, including a $45 million fine in January 2025 for securities law violations and a $26 million FINRA settlement in March over identity verification failures. It also paid $3.9 million in 2024 for crypto withdrawal issues and $7.5 million in 2023 after losing a Massachusetts court case tied to product oversight and marketing practices. These regulatory actions highlight ongoing compliance and oversight challenges faced by Robinhood. HOOD's Earnings Estimates & Price Performance Over the past month, the Zacks Consensus Estimate for 2025 and 2026 has been revised upward to $1.31 and $1.68, respectively. This reflects a bullish sentiment among analysts. Image Source: Zacks Investment Research The Zacks Consensus Estimate for HOOD's earnings implies 20.2% and 28.1% year-over-year growth in 2025 and 2026, respectively. Further, Robinhood shares have surged an impressive 173.65% this year, driven by rising investor confidence in its strategic growth initiatives and a more favorable regulatory outlook for cryptocurrencies. The rally also reflects broader optimism around the mainstream adoption of digital assets and Robinhood's positioning to capitalize on that trend. As such, HOOD stock has outperformed the industry's rally of 22.4%. Meanwhile, shares of Schwab gained 30.4%, while Interactive Brokers jumped 46.5%. Making Sense of Robinhood's Premium Valuation Robinhood's premium valuation can be justified by its rapid transformation into a diversified, global financial services platform. The company has moved well beyond its roots in retail brokerage, expanding into wealth management, advisory services and consumer finance. Its growing international footprint has been bolstered by tapping into high-growth crypto and fintech markets. Robinhood's evolving product suite caters to a younger, tech-savvy investor base, while its declining reliance on transaction-based revenue reflects increasing business maturity. Solid liquidity, a $1.5 billion buyback program and robust user growth amid rising digital asset adoption further reinforce investor confidence. Although regulatory scrutiny remains a headwind, Robinhood's innovation-driven growth strategy and expanding global presence suggest that its lofty valuation reflects more than just hype; it's a bet on the company's long-term potential to reshape modern investing. At present, Robinhood sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. #1 Semiconductor Stock to Buy (Not NVDA) The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow. One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
