TLDR
- Robinhood (HOOD) stock fell 5% to $96.58 on Thursday, from a prior close of $101.93.
- The company won Dubai Financial Services Authority approval, with a Middle East launch planned for 2027.
- Q2 crypto revenue fell 38% year over year to $100 million, a third straight quarterly drop.
- Analysts rate the stock “Moderate Buy” with a $130.29 average target.
- Q3 earnings are due October 27.
Robinhood Markets (HOOD) stock fell 5% on Thursday, trading at $96.58 after closing at $101.93 the day before. The stock hit a low of $95.62 during the session.
About 19.1 million shares changed hands by mid-day. That is 29% below the average daily volume of 26.7 million.
The drop came on the same day Robinhood announced a new Dubai license. The Dubai Financial Services Authority approved the company to launch its retail platform in the region next year. Good news, but traders sold anyway.
The platform will offer 10 approved asset classes. These include equities, cryptocurrencies, ETFs and investment tokens. It will run from the Dubai International Financial Centre.
CEO Vlad Tenev said the expansion brings the company closer to a global platform. Salah Kaddoura will lead the regional business.
Earnings Next Week
Robinhood reports third-quarter results on October 27. Investors are watching transaction revenue, funded accounts, assets under custody and crypto activity.
Crypto is the sore spot. Second-quarter crypto revenue fell 38% to $100 million, out of $1.31 billion in total net revenue. It was the third quarter in a row of declines.
There were some better signs. Crypto trading volume hit $17.5 billion in August, up 61% from July. It was still down 38% from a year earlier.
Most of that volume came through Bitstamp. The exchange handled $10.1 billion in August, compared with $7.4 billion on the Robinhood app.
In the last report, on July 29, Robinhood earned $0.62 per share. Analysts expected $0.44. Revenue came in at $1.31 billion, against estimates of $1.29 billion.
Valuation may also be a factor. The stock has a P/E ratio of 42.55 and a market cap of $86.83 billion. It trades below its 50-day average of $109.46 and just under its 200-day average of $97.03.
Analysts and Insiders
Analysts remain mostly positive. Rosenblatt started coverage with a Buy rating and a $135 target. Needham raised its target to $126.
Bank of America lifted its target to $156 earlier this month. Wells Fargo went the other way, cutting its target from $125 to $120 with an equal weight rating.
Of the analysts covering the stock, 29 rate it Buy or Strong Buy. Five say Hold and one says Sell.
Insiders have been sellers. They sold 1,089,658 shares worth about $128 million in the last quarter. CFO Shiv Verma sold 11,472 shares in September at $110.42 under a pre-arranged plan.
Robinhood also faces competition in tokenized stocks. Solana has reportedly passed Robinhood’s blockchain in the number of tokenized-stock holders.
Separately, TradePMR added ICE Connect Wealth to Robinhood’s Fusion platform for advisors. Robinhood Chain, launched in July, runs Stock Tokens in more than 120 countries.
The stock was last quoted near $97 on Thursday, with earnings set for October 27.
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