Shares of Robinhood (NASDAQ:HOOD) have been battered since 2022 kicked off, and they’re down more than 35% year-to-date. Yesterday, the popular brokerage reported Q4 earnings after the bell, and the results were not exactly up to par. Shares of HOOD stock plunged as much as 14% lower before recovering. Now, shares are down less than a percent as investors digest the results of the earnings. With that said, let’s take a look at HOOD stock price predictions to see what’s next for Robinhood.
It seems the wave of retail trading that the coronavirus pandemic brought is now settling down. For Q4, Robinhood reported 17.3 million monthly average users (MAUs), down from 18.9 million in the previous quarter. On the other hand, revenue presented a better story, as Robinhood reported Q4 revenue of $363 million. The revenue figure beat out consensus analyst estimates of $362.1 million by a small margin.
However, guidance for Q1 of this year is what’s really hurting HOOD stock. Robinhood reported Q1 revenue guidance of “less than $340 million,” which would represent a 35% year-over-year (YOY) decline. In addition, many analysts expect Robinhood’s revenue to take a hit if the U.S. Securities and Exchange Commission (SEC) cracks down on payment for order flow (PFOF). During Q4, 72% of Robinhood’s revenue was based off of PFOF and other transaction rebates.
With the sub par earnings and SEC threat in mind, investors are wondering how HOOD stock will fare for the rest of the year. Let’s dive right in to see how Wall Street feels.
HOOD Stock Price Predictions: What’s Next for Robinhood?
- JMP Securities has a price target of $45. Analyst Devin Ryan lowered his price target from $58 after reviewing Q4 results. Ryan believes that in order for Robinhood to succeed, it must “diversify its business further beyond just a trading offering.” However, Ryan adds that the “breadth of the platform has increased tremendously,” which should translate to better earnings in the coming quarters.
- Mizuho has a price target of $20. Analyst Dan Dolev pointed out that despite the MAU and guidance miss, there were several positives in the Q4 earnings report. Dolev stated that average revenue per unit (ARPU) was “surprisingly stable,” and that it didn’t change much from Q3 levels. Moreover, Dolev adds that YOY comparisons will be difficult since 2021 experienced a huge surge in retail trading that directly benefited Robinhood.
- Finally, both Piper Sandler and Barclays lowered their price targets upon the release of Q4 earnings. Piper Sandler analyst Richard Repetto has a $13 price target, while Barclays analyst Ross Sandler has a $12 price target.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.