JPMorgan Chase has assessed Robinhood's third-quarter results as solid but lacking in quality due to weaker-than-expected cryptocurrency revenue. Despite earnings per share exceeding expectations by over 15%, this was largely due to tax benefits linked to stock option compensation. The bank's analysts have raised their price target for Robinhood from $122 to $130, maintaining a neutral rating, as they anticipate continued improvement in profit margins.
Robinhood's stock fell 11% to close at approximately $127, driven by disappointing cryptocurrency net revenue of $268 million. The company's cryptocurrency expense ratio improved slightly to 67 basis points, but analysts warn that the business remains heavily reliant on a small number of active traders. Market expectations helped mitigate some of the revenue shortfall, but the overall impact of the crypto segment was significant.
JPMorgan Sees Robinhood's Q3 Results as Solid but Impacted by Crypto Revenue
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