TLDR
- Robinhood stock dropped 3.5% to $115.26 on Monday with trading volume 28% below average
- Analysts maintain a Moderate Buy rating with an average price target of $136.32, while Mizuho set a higher target of $172
- Company insiders sold nearly $476 million worth of shares in the past three months, including $104.8 million by CEO Vladimir Tenev
- Q3 earnings crushed expectations with revenue up 100% year-over-year to $1.27 billion
- Prediction markets business on track for $300 million Q4 run-rate after 2.5 billion contracts in October
Robinhood Markets stock fell 3.5% during Monday trading, closing at $115.26 after opening the session at $119.50. The decline came despite strong recent performance that has pushed the stock’s market value to $103.64 billion.
Robinhood Markets, Inc., HOOD
Trading volume reached approximately 28.18 million shares, which was actually 28% lower than the stock’s average daily volume of 39.19 million shares. The stock traded as low as $114.10 during the session.
The recent drop follows a period of strong gains for the online brokerage. The stock’s 50-day moving average sits at $132.04, while its 200-day moving average stands at $112.37.
Wall Street analysts remain generally positive on the stock despite the recent pullback. The consensus rating among 23 analysts is Moderate Buy, with one Strong Buy rating, fourteen Buy ratings, seven Hold ratings, and just one Sell rating.
The average analyst price target is $136.32, suggesting about 18% upside from current levels. Mizuho Securities maintained its Outperform rating with a $172 price target, one of the highest on Wall Street.
Earnings Beat and Revenue Growth
The company delivered impressive third-quarter results on November 5th. Robinhood reported earnings of $0.61 per share, beating analyst expectations of $0.41 by nearly 49%.
Revenue came in at $1.27 billion for the quarter, surpassing estimates of $1.15 billion. That represented a 100% increase compared to the same quarter last year.
The company achieved a net margin of 52.19% and return on equity of 21.74%. Analysts expect Robinhood to post $1.35 in earnings per share for the full year.
Mizuho raised its 2026-2027 revenue estimates by 6-7% based on the growth of Robinhood’s prediction markets platform. The firm said the platform is on track for a $300 million run-rate in the fourth quarter.
This growth came after Robinhood processed 2.5 billion contracts in October through its prediction markets business. The platform allows users to bet on election outcomes and other events.
Heavy Insider Selling Raises Questions
Company insiders have been selling large blocks of stock over the past three months. CEO Vladimir Tenev sold 750,000 shares on October 1st at an average price of $139.73, totaling $104.8 million.
Chief Legal Officer Daniel Martin Gallagher Jr. sold 120,000 shares on December 3rd at $132.13 per share, worth $15.9 million. That sale reduced his stake by 21.82%.
In total, insiders have sold approximately 3.69 million shares worth around $475.9 million over the past quarter. Despite this selling, insiders still own 19.95% of the company.
Institutional investors now hold 93.27% of Robinhood’s stock. Several firms increased their positions during the third quarter, including Hantz Financial Services and Valley National Advisers.
The stock currently trades at a price-to-earnings ratio of 47.83 and has a beta of 2.43. Robinhood offers commission-free trading of stocks, ETFs, options, cryptocurrencies, and other assets through its mobile-first platform.
Bank of America recently lowered its price target from $166 to $154 while maintaining a Buy rating. Keefe, Bruyette & Woods raised its target to $135 with a Market Perform rating following the November earnings report.
The post Robinhood (HOOD) Stock Drops as Insiders Dump $475 Million Worth of Shares appeared first on Blockonomi.
Source: https://blockonomi.com/robinhood-hood-stock-drops-as-insiders-dump-475-million-worth-of-shares/