Dan Dolev is an analyst at Mizuho and believes that Robinhood Markets Inc. (NASDAQ:HOOD) will continue to rise because there was nothing to dislike in the Q1 results.
HOOD’s first quarter saw 14.4 millions monthly active users. This was down from the 14.9 million that analysts expected and actually lower than Q4 when it ended.
Dolev said in an interview with CNBC after the earnings report that the overall quarter was “record-breaking” for the fintech company and therefore warrants investment at the current level.
Robinhood’s stock price has already risen by nearly 50% over the past few weeks.
Why does Mizuho have a bullish outlook on Robinhood?
Mizuho has a bullish view on Robinhood Markets, as the company is “aggressive” in its approach to a market worth $600 billion.
According to analyst Dan Dolev, the financial services firm is rapidly expanding into new regions, such as Asia and Europe. This could boost its revenues from $3 billion up to $30 billion in the next 10 years.
In an interview with CNBC this week, he said: “The product’s velocity is one of the highest I have ever seen. There’s always something new.”
HOOD’s earnings per share more than doubled and its revenues increased by 50% during Q1. The fintech company does not yet pay dividends.
HOOD targets IBKR, Schwab and their clients
Dolev, from Mizuho, is confident that the days when Robinhood was considered a joke for “millennials” have long passed. It’s now taken more seriously.
HOOD is even pursuing the more wealthy clients that are typically attracted to Charles Schwab or Interactive Brokers. And it has been successful in stealing this client base, he said.
Robinhood Markets Inc. recorded deposits of approximately $18 billion in its first quarter.
Dan Dolev believes that HOOD will reach $80 per share by the end this year. He expects a 60 percent increase from the current level.
Robinhood Q1 Earnings Highlights
Robinhood released its Q1 results and here are some key numbers:
- Earned 37c per share as opposed to the expected 33c
- Revenue of $927 Million versus expected $920 Million
- Revenue from transactions increased by 77% more than expected
- Crypto revenue doubled to $252 Million – far above the $247 consensus
Other Wall Street firms are also bullish on Robinhood, although not to the same extent as Mizuho. The current consensus rating for HOOD is “overweight”, with a mean price target of $57, indicating a 15 percent increase from this point.
Is Robinhood taking away high-net worth clients from Schwab and IBKR, as this post claims? This post may change as new information unfolds
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