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In the Coinbase (COIN) vs. Robinhood (HOOD) investor debate, there is fodder for both bulls and bears.
But for veteran fintech analyst Dan Dolev at Mizuho Securities, Robinhood remains an undefeated name with room to grow.
“They’re in the early stages of becoming one of the top financial services companies in the world,” he told Yahoo Finance executive editor Brian Sozzi during the Opening Bid podcast (see video above; listen below). “There is no millennial, Gen Alpha, any of the [18- to 30-year-olds] that does not know what Robinhood is globally,” Dolev said. “It’s an amazing brand.”
Dolev rated Robinhood an Outperform with a $60 price target, estimating a 50% upside to the stock price from its current levels of $39. The average Wall Street price target on Robinhood is $44, according to Yahoo Finance data.
Robinhood — which has won this year’s Yahoo Finance Comeback of the Year award due to its big turn to profitability, innovative product releases, and a 180% stock price jump — has undergone a seismic shift since its upstart beginnings in meme stocks in 2013.
It famously made headlines in 2021 when traders stepped in to pour billions of dollars into companies like Gamestop (GME) and AMC (AMC) at a time when they were being shorted elsewhere. Everyday consumers cheered for the platform, with some speculating it was living up to its namesake storybook folk hero, Robin Hood.
Mizuho’s Dolev began covering the company about three years ago, when “people thought it was a bunch of kids that had no idea what they’re doing.”
Today, Robinhood is a different company.
With a combination of product drops, a new desktop trading platform, high interest rates, a crypto surge, and a leaner expense base, Robinhood is reporting banner earnings.
Its third quarter revenue grew 36% year over year to $637 million. Net earnings improved sharply to $150 million from an $85 million loss a year ago.
Average revenue per user (ARPU) increased by 31% to $105. Gold subscribers hit 2.2 million. Total funded customers reached 24.3 million, up 1 million from last year.
For the nine months ended Sept. 30, total revenue increased 39% to $1.9 billion. Net income has swung from a loss of $571 million to a profit of $495 million.
“I remember when we entered the public markets, it was sort of at the height of the secular bull market and we felt good,” Robinhood co-founder and CEO Vlad Tenev told Sozzi in an interview. “But the business now is much stronger across pretty much all dimensions. We have nine business lines that are generating over $100 million in annual revenue.”
Dolev isn’t the only one with bullish sentiment on Robinhood.
Wolfe Research analyst Steven Chubak reflected on the company’s first Investor Day earlier this month, rating the stock as Outperform and raising the price target to $50 from $27.
“The company did a great job unpacking these growth opportunities, which appear more credible under a Trump administration,” he wrote. “Given favorable tailwinds to Robinhood’s business and new and emerging sources of EPS growth, we remain convicted in this long-term bull case.”
As for Robinhood’s rival Coinbase, Dolev remains one of the vocal bears on the Street. Robinhood is a more diversified platform moving faster on new products, Dolev contended.
“It’s [Robinhood], not just crypto, and I think that’s what makes it so unique,” Dolev said of the differences between Robinhood and Coinbase.
Dolev has a Sell rating on Coinbase with a $215 price target, which projects 32% downside from current levels of $315. The average Wall Street price target on Coinbase is $283, according to Yahoo Finance data.
Three times each week, Yahoo Finance Executive Editor Brian Sozzi fields insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.
Grace Williams is a writer for Yahoo Finance.
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