Robinhood Q3 Preview: Retail Bets On Strong Q3 Earnings Driven By Surge In Trading Volumes, Product Expansions

• According to a Stocktwits poll, 70% of retail traders on the platform expect the company to top expectations on Wednesday, while 30% believe it will fail to do so.
• Barclays analysts said earlier that trading activity was "quite robust" through the quarter, and interest-earning assets generally grew across the brokers.
• A ‘bullish’ trader said that the stock would hit over $170 following the earnings report.

Robinhood Markets (HOOD) stock has gained nearly 1% over the past week, ahead of its quarterly earnings report scheduled for Wednesday.

According to Fiscal.ai data, Wall Street expects the retail trading platform to post earnings of $0.54 per share, on revenue of $1.22 billion. If the company manages to meet expectations, it would triple its profit compared to the same quarter last year.

What Is Retail Thinking?

According to a Stocktwits poll, 70% of retail traders on the platform expect the company to top expectations on Wednesday, while 30% believe it will fail to do so.

One user said, “They print money.”

While another ‘bullish’ trader said that the stock would hit over $170 following the earnings report.

What Are Analysts Saying?

In September, Robinhood rolled out a new social media platform for its active retail trading community, alongside several other product launches, as part of its bid to expand its user base. CEO Vlad Tenev had told Stocktwits earlier this year that the company aims to become a consumer-focused bank by offering luxury financial services at affordable prices to subscribers of its Gold services, launched last year.

According to TheFly, CICC analysts said in October that the company has attracted a large number of "long-tail" customers through its user-friendly, interactive investment platform and is becoming the preferred platform for active traders.

While Barclays analysts noted that trading activity was "quite robust" throughout the quarter, interest-earning assets generally increased across the brokers. However, the firm said that the federal funds rate is expected to be a larger headwind than previously modeled.

The Federal Reserve cut its benchmark interest rate by 25 basis points in September, which is expected to attract a higher number of investors. However, analysts are cautious that it could also erode profits from its interest-earning assets amid its push into financial services.

Robinhood stock has more than tripled this year, amid a surge in trading activity due to various policies of the Trump administration, as well as its inclusion in the benchmark S&P 500 index.

Also See: Crypto Slide Deepens: Bitcoin Risks Drop To $90K Range, Warns Analyst

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