A significant driver of top-line growth: Robinhood Markets Inc. (HOOD)

With 5.16 million shares changed hands, the volume of the stock remained lighter than its average volume of 10.06 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $9.84 whereas the lowest price it dropped to was $9.56. The 52-week range on HOOD shows that it touched its highest point at $16.49 and its lowest point at $6.81 during that stretch. It currently has a 1-year price target of $11.45.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of HOOD was up-trending over the past week, with a rise of 2.00%, but this was up by 18.85% over a month. Three-month performance dropped to -4.24% while six-month performance rose 9.22%. The stock lost -25.19% in the past year, while it has gained 19.29% so far this year. A look at the trailing 12-month EPS for HOOD yields -1.49 with Next year EPS estimates of -0.45. For the next quarter, that number is -0.14. This implies an EPS growth rate of 85.00% for this year and 59.80% for next year.

Float and Shares Shorts:

At present, 882.36 million HOOD shares are outstanding with a float of 699.61 million shares on hand for trading. On Oct 13, 2022, short shares totaled 34.96 million, which was 3.97% higher than short shares on Sep 14, 2022. In addition to Mr. Vladimir Tenev as the firm’s Co-Founder, Pres, CEO & Chairman, Mr. Baiju Prafulkumar Bhatt serves as its Co-Founder, Chief Creative Officer & Director.


Institutional Ownership:

Through their ownership of 62.96% of HOOD’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 20.97% of HOOD, in contrast to 18.36% held by mutual funds. Shares owned by individuals account for 15.91%. As the largest shareholder in HOOD with 6.52% of the stake, The Vanguard Group, Inc. holds 49,033,955 shares worth 49,033,955. A second-largest stockholder of HOOD, ARK Investment Management LLC, holds 32,910,470 shares, controlling over 4.37% of the firm’s shares. Nikko Asset Management Co., Ltd. is the third largest shareholder in HOOD, holding 23,282,666 shares or 3.10% stake. With a 2.59% stake in HOOD, the ARK Innovation ETF is the largest stakeholder. A total of 19,505,577 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.45% of HOOD stock, is the second-largest Mutual Fund holder. It holds 18,452,450 shares valued at 150.2 million. Vanguard Small Cap Index Fund holds 2.08% of the stake in HOOD, owning 15,642,003 shares worth 127.33 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for HOOD since 15 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 2 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With HOOD analysts setting a high price target of $25.00 and a low target of $8.00, the average target price over the next 12 months is $11.42. Based on these targets, HOOD could surge 157.47% to reach the target high and fall by -17.61% to reach the target low. Reaching the average price target will result in a growth of 17.61% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. HOOD will report FY 2022 earnings on 01/25/2024. Analysts have provided yearly estimates in a range of -$1.03 being high and -$1.17 being low. For HOOD, this leads to a yearly average estimate of -$1.13. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Robinhood Markets Inc. surprised analysts by $0.12 when it reported -$0.20 EPS against a consensus estimate of -$0.32. The surprise factor in the prior quarter was -$0.02. Based on analyst estimates, the high estimate for the next quarter is -$0.11 and the low estimate is -$0.17. The average estimate for the next quarter is thus -$0.15.

Summary of Insider Activity:

Insiders traded HOOD stock several times over the past three months with 22 Buys and 18 Sells. In these transactions, 728,149 shares were bought while 601,544 shares were sold. The number of buy transactions has increased to 134 while that of sell transactions has risen to 127 over the past year. The total number of shares bought during that period was 8,160,493 while 302,051,452 shares were sold.

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