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Robinhood Shares Drop on Earnings Report as Meme Traders Disappear

Robinhood Shares Drop on Earnings Report as Meme Traders Disappear

Thomas Westwater, Analyst

Robinhood, HOOD, Earnings Report, Meme Stocks - Talking Points

  • Robinhood stock drops after poor first-quarter earnings report
  • Users and revenue per user misses analysts’ expectations
  • Share price sinks in after-hours trading as investors grow cautious

The retail brokerage company Robinhood saw its share price crater over 10% in after-hours trading following its first-quarter earnings report. The Q1 numbers revealed earnings per share of -$0.45, nearly 20% more than the -$0.38 loss that analysts were expecting, on an adjusted basis. That was on revenue of 299 million, missing the 352.93 million expectation.

Robinhood also posted poor figures on its user base. For the months from January to March, the brokerage saw monthly active users of 15.9 million versus an estimated 18.2 million, per Bloomberg estimate. Those users generated less revenue than expected, with an average revenue per user of $52 versus an estimated $62.46.

Earlier this week, Robinhood reported that it would cut 9% of its workforce, which prompted concerns about today’s numbers, which turned out to be well warranted. The decrease in users and revenue per user suggests that the meme stock frenzy brought on during the pandemic, likely aided by government stimulus checks, is over. The company will also pull back guidance on revenue going forward but intends to report some monthly statistics.

Robinhood One-Minute Chart

robinhood chart

Chart created with TradingView

**Check out Apple's earning report here**

**Check out Amazon earnings and its price reaction here**

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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