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Robinhood's Impressive 2024: Should Investors Buy, Sell, or Hold?

• By Adam Murphy
Robinhood's Impressive 2024: Should Investors Buy, Sell, or Hold?
$42.15 +1.8%
Market Cap $38.2B
Revenue (2024) $2.95B
Net Income (2024) $1.41B

Robinhood Markets, Inc. (NASDAQ: HOOD) just wrapped up an impressive 2024, with the fourth quarter capping off a year of explosive growth. The company reported record-breaking numbers across the board, from revenues to user growth, and even managed to turn a hefty profit.

Record-Breaking Numbers

Robinhood's Q4 2024 results were nothing short of stellar. Here are some of the highlights:

  • Revenue Surge: Total net revenues skyrocketed by 115% year-over-year to $1.01 billion, driven by a massive increase in transaction-based revenues, particularly from cryptocurrencies (up over 700%!)
  • Profitability: Net income jumped over 10X to $916 million, compared to just $30 million in Q4 2023
  • User Growth: Funded customers grew by 8% to 25.2 million, while assets under custody (AUC) surged 88% to $193 billion
  • Gold Subscribers: Robinhood's premium subscription service saw an 86% increase in subscribers, reaching 2.6 million

Product Momentum and Expansion

  • Crypto Growth: Crypto notional volumes up over 400% year-over-year, with plans to acquire Bitstamp
  • Active Traders: New features like index options and futures trading, plus Robinhood Legend platform
  • Global Ambitions: Expansion into Asia-Pacific and UK markets
  • Investment Advisory: Plans to acquire TradePMR for wealth management expansion

Competitive Landscape

Robinhood operates in a highly competitive space, with rivals like Charles Schwab, ETRADE, Webull, and Coinbase. While the company has shown strong user growth and improving profitability, it still faces significant competition in both traditional trading and crypto markets.

Investment Recommendation

For casual investors, we recommend a HOLD rating on Robinhood stock. While the company's growth story is compelling, with record revenues and strong user growth, the current valuation may limit near-term upside. The company's expansion into new markets and product lines positions it well for future growth, but investors should monitor competitive pressures and regulatory developments closely.