Keybanc analyst Josh Beck maintained Robinhood Markets Inc (NASDAQ:HOOD) with an Overweight and raised the price target from $15 to $22.
The analyst refreshed his HOOD model as they approach the end of the quarter, incorporating HOOD disclosures and KBCM estimates.
His revised fiscal 2024 transaction revenue estimate assumes equity, option contract, and crypto volume growth of 25%, 14%, and 83% quarter-on-quarter, respectively, leveraging previously disclosed monthly metrics from HOOD and third-party data for March and stable rebate levels.
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Beck’s net interest revenue revision principally assumes a larger interest-earning balance.
His fiscal 2025 top-line estimate moves higher for similar reasons, while his adjusted EBITDA estimate moves higher, to a lesser extent, as he contemplated additional investment dollars directed toward new/emerging products (generally across tech and marketing spend).
The analyst permitted the vast majority of fiscal 2024 revenue upside (vs. prior estimate) to drop to operating profit, while fiscal 2025 drops less revenue upside to operating profit, as he noted some incremental investment in new and emerging products.
The price target reflected higher estimates and multiple, building on an improving margin profile and compelling growth opportunities.
Beck’s revised price target reflected 19.5x fiscal 2024 adjusted EBITDA, a discount to a select group of FinTech peers (median 22.6x calendar year 2024 adjusted EBITDA).
He projected first-quarter revenue of $540.7 million (prior $474.1 million) and adjusted EBITDA of $148.9 million (prior $82.3 million).
Robinhood Markets stock gained 134% in the last 12 months. Investors can gain exposure to the stock via ARK Next Generation Internet ETF (NYSE:ARKW) and ARK Fintech Innovation ETF (NYSE:ARKF).
Price Action: HOOD shares traded higher by 0.22% at $20.06 on the last check Thursday.
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