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On Tuesday, Morgan Stanley adjusted its outlook on Robinhood Markets (NASDAQ:HOOD), the favored brokerage platform, following the corporate’s second-quarter earnings report. The agency elevated its worth goal for Robinhood from $20.00 to $21.00, whereas sustaining an Equalweight score on the inventory.
The adjustment comes after Robinhood’s second-quarter monetary outcomes, which prompted the analyst to revise upward the earnings per share (EPS) estimates for the approaching quarters. The estimated EPS for the third quarter of 2024 was raised by 12 cents to $0.22, up from the earlier estimate of $0.10. The total-year 2024 EPS forecast was additionally elevated by 33 cents to $0.83, and the 2025 EPS projection was lifted by 21 cents to $0.68.
The raised worth goal and EPS estimates are attributed to Robinhood’s better-than-expected Choices transaction revenues and better curiosity revenues. This improved monetary efficiency is seen as a probable indicator of Robinhood’s sustained shift to profitability.
The analyst cited Robinhood’s give attention to value administration and robust execution as key elements that instill extra confidence within the firm’s monetary outlook. In consequence, Morgan Stanley has moved from a valuation vary to a single level worth goal for Robinhood, reflecting a extra sure view of the corporate’s future efficiency.
In different current information, Robinhood Markets Inc (NASDAQ:). has reported a formidable Q2 2024, with a 40% year-over-year income improve to $682 million and an unprecedented earnings per share (EPS) of $0.21. This efficiency was pushed by document buying and selling volumes and strong margin lending. BofA Securities has raised its worth goal for Robinhood from $28.00 to $32.00, sustaining a Purchase score. Piper Sandler has additionally upgraded the inventory’s score to Obese and elevated its worth goal to $23.00.
The corporate’s internet deposits reached a brand new peak at $13 billion, indicating a 41% annual development charge. In a transfer to diversify its portfolio, Robinhood has made strategic acquisitions, together with world crypto change Bitstamp and AI firm Pluto. The agency can be planning to introduce index choices and futures buying and selling, together with a brand new web-based buying and selling platform.
These current developments, together with the anticipation of latest product launches and worldwide growth efforts, are anticipated to contribute positively to Robinhood’s future efficiency. Each BofA Securities and Piper Sandler have expressed confidence within the firm’s development prospects and its means to capitalize on these strategic initiatives.
InvestingPro Insights
As Robinhood Markets (NASDAQ:HOOD) continues to draw consideration following its earnings report and Morgan Stanley’s up to date worth goal, insights from InvestingPro present further context for buyers. The corporate’s market capitalization at the moment stands at roughly $16.28 billion, reflecting investor sentiment and market attain. With a P/E ratio of 55.91 and an adjusted P/E ratio for the final twelve months as of Q2 2024 at 56.13, Robinhood trades at a excessive earnings a number of, suggesting that buyers could count on increased earnings development sooner or later.
InvestingPro Ideas point out that analysts are optimistic about Robinhood’s profitability, with internet earnings anticipated to develop this yr and three analysts having revised their earnings upwards for the upcoming interval. This aligns with the optimistic changes in EPS estimates famous by Morgan Stanley. Furthermore, the inventory has skilled a big return during the last week, with a worth complete return of seven.73%, and a notable return of 72.95% over the previous yr, highlighting its potential for short-term and long-term positive aspects.
For buyers in search of extra in-depth evaluation, further InvestingPro Ideas could be discovered at https://www.investing.com/professional/HOOD, which can additional information funding selections relating to Robinhood Markets.
This text was generated with the help of AI and reviewed by an editor. For extra info see our T&C.
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