Robinhood August Data Should be Relatively Supportive for Shares Says Analyst

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By Sam Boughedda

Robinhood (NASDAQ:HOOD) released its August operating data on Monday, which revealed Net Cumulative Funded Accounts at the end of August were 22.9 million, unchanged from the end of July 2022, while Monthly Active Users came in at 13.3 million, up 0.1 million from the end of July.

Following the data, analysts at Piper Sandler, Goldman Sachs, and Morgan Stanley released notes commentating on Robinhood's performance:

The Piper Sandler analyst, who has a Neutral rating and a $10 price target on the stock, said the company's "August trading activity outperformed MoM in equities & options."

"HOOD reported total equity & option DARTs of 2.2 million in August, up ~19% MoM and down 25% YoY. In Equities, total notional value traded increased ~35% MoM to $66.0 billion (-10% YoY), while DARTs increased 19% MoM to 1.6 million (-25% YoY)," said the analyst. "Bottomline, we are maintaining our 3Q22 EPS estimates as outperformance in equities & options was offset by lower crypto volumes. For comparison purposes, we note there were 23 trading days in August 2022, 20 trading days in July 2022, and 22 trading days in August 2021."

Meanwhile, a Goldman Sachs analyst who has an $11 price target on Robinhood shares, stated the results were relatively solid.

"Trading activity across equities and options came in sequentially stronger, partially offset by weaker crypto trading activity. Funded accounts remained flattish MoM, despite MAUs rising modestly from July levels," wrote the analyst. "Two months into the quarter, transaction revenues appear to be tracking roughly 4% above consensus in the 3rd quarter, barring any major uptick/downtick in activity levels in September. Thus, we believe these results should be relatively supportive for shares given the better than expected revenue dynamics."

Finally, a Morgan Stanley analyst maintained an Equal-Weight rating and $11 price target on Robinhood shares.

The analyst said Robinhood "reported August metrics today that showed m/m flat user growth and engagement and +12% net new asset growth. NNA flows of $0.8b were broadly in line with July and continue to show signs of slowing from average of $1.8b/month in 1H22. Run-rating Jul/Aug net flows for Sep implies 14% annualized organic growth for 3Q that is below 20% MSe."

Robinhood shares are down over 3% Tuesday.