What's Going On With Robinhood Stock?

Robinhood Markets Inc (NASDAQ: HOOD) shares are trading higher Thursday after the company reported fourth-quarter results showing an increase in average revenue per user. Robinhood also announced plans to cut share-based compensation and buy back its stock that got tied up in the crypto fallout related to FTX.

What Happened: Robinhood said fourth-quarter revenue increased 5% sequentially to $380 million, which missed average analyst estimates of $397.1 million, according to data from Benzinga Pro. The company reported a quarterly net loss of 19 cents per share, missing estimates for a loss of 14 cents per share.

Monthly active users decreased by 800,000 to 11.4 million quarter-over-quarter, but average revenue per user increased to $66 from $63.

Robinhood ended the quarter with $6.3 billion in cash and equivalents, up from $6.2 billion sequentially. 

"We're now starting to see meaningful traction on a number of the products we launched, which gives us confidence they can grow into significant business lines over time," said Vlad Tenev, co-founder and CEO of Robinhood.

"Additionally, co-founder Baiju Bhatt and I announced today that we cancelled nearly $500 million of our share-based compensation to ensure the company has as many resources as possible to deliver value to customers and shareholders."

Robinhood's board authorized the company to pursue purchasing most or all of the 55 million remaining Robinhood shares that Emergent Fidelity Technologies bought in May 2022. 

First-quarter net interest revenue is expected to be up approximately $20 million sequentially. Full-year 2023 operating expenses are expected to be in a range of $2.375 billion to $2.515 billion. 

Related Link: Robinhood Q4 Earnings Highlights: Revenue, ARPU Up Sequentially, Company Buying Back SBF's Shares And More

Following the print, Deutsche Bank analyst Brian Bedell maintained Robinhood with a Hold and raised the price target from $9 to $11.

HOOD Price Action: Robinhood has a 52-week high of $16.49 and a 52-week low of $6.81.

The stock was up 3.72% at $10.86 at time of publication, according to Benzinga Pro.

Photo: Tech Daily from Flickr.