By Andrew Welsch

Shares of Robinhood have had a tremendous run, skyrocketing 351% over the past 12 months. When the company reports earnings Wednesday, shareholders will be looking for signs that the good times can continue to roll.

Wall Street analysts expect Robinhood to report fourth-quarter earnings per share of 41 cents on revenue of $934 million. That compares with earnings of three cents and revenue of $471 million for the fourth quarter of 2023.

Shares of Robinhood are up 43% this year compared with a 3% gain for the S&P 500. The stock was trading hands at $53.60 Tuesday afternoon.

Shareholders will be looking for updates on a variety of Robinhood's growth initiatives, including its forthcoming robo-advisor and acquisition of custodian TradePMR. The Menlo Park, Calif.-based company has been launching new products and services and dangling matching bonuses to win wallet share with clients. Robinhood had nearly 25 million customers and $195 billion in assets under custody as of Nov. 30.

Digital darling. Cryptocurrency was a catalyst for Robinhood's stock last year, and could be again in 2025, given President Donald Trump's desire to loosen crypto regulations and boost investor demand for digital assets more generally. Last month, acting SEC Chairman Mark Uyeda unveiled the formation of a task force to study cryptocurrencies and chart a "sensible regulatory path that respects the bounds of the law."

Devin Ryan, a stock analyst with Citizens JMP Securities, says there are opportunities ahead for Robinhood beyond offering investors more access to digital assets. "Ultimately, we expect Robinhood to play an important role in that connection of the legacy financial markets with blockchain, not to mention as a leader in furthering innovation with the technology, which we believe is in the firm's DNA from the start," Ryan wrote in a Jan. 24 research note.

Investors should also expect to see signs that Robinhood benefited from a surge in trading activity during the fourth quarter following the presidential election. Rival brokerage firms, such as Interactive Brokers, have already reported upticks in investor activity as part of their fourth-quarter earnings.

Eye on interest rates. In addition, analysts and investors will be on the lookout for fresh guidance on how higher-for-longer interest rates may affect Robinhood's net interest income, a key metric for banks and brokerage firms.

In a research note last month, analysts at BofA Securities said the current environment is a "goldilocks scenario" for brokerage firms given prevailing interest rates and declining cash sorting (a process by which customers move idle cash from low-paying bank sweep accounts to higher paying options such as money-market funds). The analysts said Interactive Brokers and Robinhood were top picks.

Write to Andrew Welsch at andrew.welsch@barrons.com

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February 11, 2025 17:40 ET (22:40 GMT)

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