TLDR
- Meyer Malka, a Robinhood director, sold over 1 million shares worth $113.56 million, reducing his ownership by 21.57%
- Robinhood stock dropped 1.42% last week, trading between $102.11 and $104.40 per share
- The company beat earnings expectations with $0.42 per share vs. $0.30 expected and revenue up 45% to $989 million
- Institutional investors increased their holdings, with 93.27% of stock now owned by hedge funds and institutions
- CEO Vlad Tenev discussed AI’s potential to transform work and investing during the week
Robinhood Markets faced a mixed week as a major insider sale coincided with modest stock price declines, even as institutional investors continue building positions in the trading platform company.
Director Meyer Malka executed a major stock sale on August 28th, offloading 1,093,288 shares at an average price of $103.87. The transaction totaled $113.56 million and reduced Malka’s ownership stake by 21.57%.
This followed an earlier sale by Malka on August 27th of 80,520 shares for $8.38 million at $104.03 per share. After both transactions, Malka still holds 3,976,234 shares worth approximately $413 million.
The stock declined 1.42% for the week ending August 31st. Shares traded in a range between $102.11 and $104.40 during the period.
Trading volume reached 22.27 million shares, below the average daily volume of 37.34 million. The stock closed Monday at $104.03, up $0.34 from the previous session.
Robinhood’s stock has shown strong performance over the past year. The 52-week range spans from $18.71 to $117.70, representing dramatic gains from the yearly low.
Strong Earnings Drive Optimism
The company recently delivered impressive quarterly results that exceeded analyst expectations. Robinhood reported earnings of $0.42 per share, beating the consensus estimate of $0.30 by $0.12.
Revenue climbed 45% year-over-year to $989 million, surpassing analyst expectations of $893.93 million. The company achieved a return on equity of 17.48% and maintained a healthy net margin of 50.13%.
During the same quarter last year, Robinhood earned $0.21 per share. Analysts project full-year earnings of $1.35 per share for the current fiscal year.
The strong financial performance has attracted attention from Wall Street analysts. Multiple firms have raised their price targets following the earnings report.
Institutional Interest Grows
Despite the insider selling, institutional investors have been increasing their Robinhood holdings. Hedge funds and institutional investors now own 93.27% of the company’s stock.
Centaurus Financial raised its position by 34.2% during the second quarter, adding 3,259 shares to reach 12,791 total shares worth $1.2 million. Orion Portfolio Solutions increased its stake by 39.7%, purchasing 7,443 additional shares for a total of 26,182 shares valued at $2.45 million.
Thrivent Financial made the largest percentage increase, boosting its position by 462.6% after buying 980,868 shares. The firm now holds 1,192,890 shares worth $111.54 million.
Several new institutional investors also established positions during the quarter. MASTERINVEST Kapitalanlage purchased shares worth approximately $238,000, while Newbridge Financial Services Group increased its holdings by 2,520%.
CEO Vlad Tenev made headlines during the week with comments about artificial intelligence’s potential impact on work and investing. Tenev suggested that investing for a living could become more prevalent as AI transforms traditional employment.
Analyst coverage remains largely positive despite the recent price decline. Eleven analysts rate the stock as a buy, six give it a hold rating, and only one assigns a sell rating.
Price targets have been raised across multiple firms. Needham boosted its target from $71 to $120 with a buy rating. Mizuho increased its target from $99 to $120 with an outperform rating.
Deutsche Bank raised its price target from $70 to $85 while maintaining a buy rating. Compass Point lifted its objective from $64 to $96 with a buy rating.
The consensus target price among analysts stands at $100.31, suggesting potential upside from current levels. Redburn Atlantic remains the lone bearish voice with a sell rating and $48 price target.
Robinhood’s market capitalization reached $92.45 billion based on recent trading prices. The stock carries a price-to-earnings ratio of 52.81 and a PEG ratio of 3.81.
The company’s beta of 2.36 indicates higher volatility compared to the broader market. The 50-day moving average sits at $101.69, while the 200-day moving average stands at $70.00.
Robinhood CEO Vlad Tenev discussed AI’s potential to revolutionize work during public appearances this week, with no major earnings releases or market events reported for the company during this period.
