Kevin Simpson Robinhood HOOD-Q BUY ON WEAKNESS Feb 28, 2025

Reported a weak quarter: missed revenues, monthly active users are down 16% YOY, transaction-based revenue -11% YOY. and -55% crypto-based transaction revenues.

They're too exposed to options and Bitcoin for their customers. They need a better base of customers. Prefers Schwab.

It's doubled so suddenly recently, so not now. Wait.

HOOD was largely written off following its IPO and subsequent flame-out, but has started to put things together nicely now. It has been losing money but will be profitable this year (53c per share), with 56c expected next year. It is cash flow positive and the stock momentum is very positive. The last quarter was excellent and blew away estimates. It is 43X earnings--expensive, but not crazily so considering its growth. Robinhood's recent momentum adds fuel to a growing and reengaging customer base, with the accelerated pace of net deposits and Gold-subscription growth the strongest year to date in the most recent monthly data available.  Sustaining it is key, with promotions a likely support after fueling the robust 1Q pace that helped lift monthly active users to 13.7 million in 1Q -- the highest since 2Q22. Mr. Tenev is a huge crypto advocate, and has done a decent job growing the company so far. He has a lot to learn as a newly-public CEO, and has certainly made lots of mistakes. But we do think he is improving. We do not really know Mr. Bhatt's story very well. Bloomberg shows insiders at about 4%. 
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Reports Wednesday. Expects 100% revenue growth, 300% earnings growth and institutions under-own it.

The CEO has gotten his act together and is outpacing peers, and he likes the new Predictions Markets Hub.

Doing well. Good brand with younger investors -- a coveted segment. Highly volatile. Crypto market is opening up for them. Very well positioned.

Likes it, but shares spiked when it looked like the president would be pro-business. Expect 15-20% downside.