One of the more compelling stocks making a big move in today’s market is Robinhood (NASDAQ:HOOD). Shares of the retail trading platform are surging after the company reported stronger-than-expected earnings. At the time of writing, HOOD stock is up nearly 10% on very high volume.
This move comes amid rather impressive top-line and bottom-line beats. Revenue for the past quarter came in at $361 million, beating expectations of $357.7 million. On the bottom line, the company narrowed its net loss to $175 million, or 20 cents per share. The Street expected a loss of 27 cents per share.
Additionally, and perhaps more importantly for many investors, the company reached adjusted EBITDA profitability. While this wasn’t expected until Q4, it’s clear that the company is making strides toward growing profitably, something long-term investors clearly want to see.
Unfortunately, it wasn’t all roses for this earnings report. Robinhood did miss on monthly active users (MAUs), losing 1.8 million over the period. This was also the lowest reading in terms of MAUs the company has had since it’s been publicly listed.
Let’s dive into what investors should make of this earnings report.
Time to Buy HOOD Stock Following Strong Earnings?
Robinhood’s trading platform has come under a tremendous amount of scrutiny from investors over the past year. The whole meme-trading debacle in 2021 left a sour taste in many investors’ mouths to this day. Accordingly, the MAU numbers Robinhood posted may not come as a surprise to many.
Rather, it’s this company’s focus on narrowing its losses and becoming profitable that have some interested in this stock. The company is now valued at a market capitalization of a little more than $10 billion. With $6.2 billion in cash as of this last quarter, investors are really only paying $4 billion for a company with annualized sales in the $1.4 billion range. That’s not necessarily cheap, but it’s not ultra-expensive either.
Accordingly, as the company slims down its operations and focuses more on high-growth areas of the market, perhaps there’s something to this rally. This is a stock I think investors may want to keep on the radar over the next few days. If this breakout continues, HOOD stock could be an intriguing way to play a near-term rally in the market.
On the date of publication, Chris MacDonald did not have (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.
