Robinhood Q3 Preview: Diversification Efforts Could Lead To Record Revenue

Core Viewpoint - Robinhood Markets is expected to demonstrate how its expansion into new areas is aiding customer acquisition and revenue growth in its upcoming third-quarter financial results, with analysts anticipating a record revenue of $1.19 billion [1][2][3]. Earnings Estimates - Analysts project Robinhood's third-quarter revenue to reach $1.19 billion, a significant increase from $637 million in the same quarter last year [2]. - If achieved, this revenue would set a new company record, surpassing the previous high of $1.01 billion in Q4 fiscal 2024 [3]. - Earnings per share are estimated at 53 cents, up from 17 cents per share in the previous year's third quarter [3][4]. Analyst Insights - Goldman Sachs analyst James Yaro emphasized the importance of Robinhood's new product launches, maintaining a Buy rating with a $130 price target [5]. - Yaro noted that the introduction of short-selling and social trading platforms could enhance user acquisition and retention [6]. - Piper Sandler analyst Patrick Moley also highlighted these product launches, maintaining an Overweight rating with a $120 price target, and described short selling as a critical addition to attract more active traders [7][8]. Key Items to Watch - Increased attention is expected on Robinhood's prediction markets, with CEO Vlad Tenev announcing that the company has traded over 4 billion event contracts, including more than 2 billion in Q3 alone [9][10]. - The company recently partnered with Sage Home Loans to provide discounted mortgage rates to Robinhood Gold subscribers, along with a $500 credit for closing costs [11]. - Analysts will focus on transaction-based revenue, particularly in options, cryptocurrencies, and equities, with cryptocurrency showing the largest year-over-year growth in Q2 [12]. Stock Performance - Robinhood's stock experienced a decline of 3.1% to $142.46, with a year-to-date increase of 261.8% [13].