What’s Next for Robinhood Stock Ahead of Q2 Results? – FOREX.com | Omd Cialis

When will Robinhood release Q2 results?

Robinhood is expected to report second quarter results after the US markets closed on Wednesday, August 3rd. A conference call will be held the same day at 2:00 p.m. PT or 5:00 p.m. ET.

Robinhood Q2 earnings consensus

Second-quarter revenue is forecast to come in at just $322.7 million, down 43% year over year, though loss per share is expected to rise to $0.33 from $2.11 .

Adjusted Ebitda, Robinhood’s key metric, is expected to show a loss of $114.4 million. That compares to the $90 million gain posted the year before.

Robinhood Q2 Earnings Preview

Robinhood shares have hit fresh lows in 2022 as the boom in trading activity seen over the past year continues to wane. It’s expected to have continued to lose traction over that period, likely losing another 430,000 users since the first quarter, with analysts looking for 15.5 million monthly active users by the end of June. That would also be a decline of about 15.5% year-over-year.

The company said user numbers are falling as those with smaller trading balances tighten budgets in the uncertain environment, although larger customers have proven more resilient.

Cryptocurrencies have proved particularly popular at Robinhood, but it was an extremely difficult quarter given that Bitcoin’s price plummeted 57% during the period, starting above $46,000 in April and ending below $20,000 in June $. Today it is trading closer to $23,000. While financial markets have proven volatile this year, the sell-off has prompted caution as markets adjust to the downturn.

“For most of our history, Robinhood has operated in a period of low interest rates, low inflation and rising markets. Our customers are now experiencing all three trends in opposite directions, perhaps for the first time in their lives. As a result, some are interacting with us less regularly and are reducing their trading activities,” said founder and CEO Vlad Tenev after the latest quarterly results.

On the positive side, the number of net accumulating accounts continues to grow and churn has decreased. This means that Robinhood is still attracting new users and successfully encouraging them to deposit cash, but fewer of them are using that money in the current environment.

Wall Street expects the number of net funded accounts to increase 2% year over year to 22.9 million. However, that will mark a significant slowdown from last quarter’s 27% gain. Also, average revenue per user has also fallen dramatically this year, with analysts expecting it to more than halve to $55 in the second quarter.

Robinhood has introduced a number of new products and services to increase its exposure to clients, and the hope is that this will shift away from relying on retail traders to day trade cyclically. Robinhood makes most of its money from pay-for-order flow. Although trading is largely free for users, Robinhood earns a spread on the trades it routes to major trading houses and brokers.

It has said that it believes its future is built on “long-term investing, spending and savings, helping customers transfer money faster, and opening up its crypto platform to customers internationally.” Since March, Robinhood has rolled out everything from crypto wallets and extended trading hours to new banking services ranging from a debit card to direct payroll deposits. Tax-deferred accounts are among the next products to hit the market. The more financial instruments it can offer, the more likely users are to stick with it and stay active.

It will take some time for new products to gain momentum, meaning difficult macroeconomic conditions are likely to continue to weigh on the business and steal the headlines in the meantime. Robinhood has already had to take drastic measures to adapt to the challenges after laying off 9% of its workforce. As sales shrink, the need to keep costs under control will prove crucial in deciding how Robinhood’s bottom line fares this year. Already tightening its belt, Robinhood said operating expenses will rise 2% to 5% in 2022, after originally forecasting a 15% to 20% increase when the company was still in hiring mode. Wall Street projects operating expenses for the second quarter were $642.5 million, down from the first quarter but still about 28% up year-over-year.

The goal is to breakeven at adjusted Ebitda levels by the end of 2022. For now, markets remain cautious that it can meet its target, forecasting that it will continue to report losses through Q4 2022 if they think it can snag a small profit.

Where is the next HOOD camp?

Robinhood got off to a flying start when it went public a year ago at $38 a share, after climbing to $85 within a week of its IPO. The jubilation was short-lived, however, as the stock has steadily fallen ever since, and today the stock is worth just $8.86.

The stock has gradually consolidated this year and the range has narrowed significantly since falling to an all-time low of $6.80 in June. Shares have since found higher bottom but struggled to break above $9.50. These can be viewed as starting levels to watch, with this week’s results possibly providing a catalyst to push stocks out of this range. In the meantime, we could see stocks continue to track the 50-day moving average, which has acted as the initial bottom for the past three sessions.

If it finds some momentum and climbs above $9.50, the stock can put $11 in the crosshairs. The 15 brokers covering Robinhood believe it can go a little higher with an average target price of $11.43. However, a consistent decline in average trading volume suggests that gaining ground might be difficult as the 5-day average volume is only a third of the 100-day average at this point.

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