Robinhood's revenue dropped 43% in the first quarter
Trading platform Robinhood Markets Inc (NASDAQ:HOOD) is up 3.6% to trade at $10.44 this morning, rebounding from steep pre-market losses, though it still hit a record low of $9 right out of the gate. The company announced first-quarter losses of 45 cents per share, nine cents lower than the expected. Plus, revenue fell 43% to $299 million, compared to analyst estimates of $355.8 million, with monthly active users dropping 10% in March alone.
Robinhood cited the recent challenging economic backdrop as the cause of the user slowdown. The company also said earlier this week it was laying off roughly 9% of full-time employees. Two analysts lowered their price targets in response to the event, with Piper Sandler cutting its objective to $11 from $13, questioning management's ability to achieve "aspirational" 2022 targets.
Options traders are targeting the stock as well, with options volume running at triple what's typically seen at this point, and pacing for the 99th percentile of its annual range. So far, 68,000 calls and 76,000 puts have been exchanged. The 4/29 10-strike put is the most popular by far, followed by the 10-strike call in that same weekly series, with new positions being opened at both. It's worth noting HOOD has found itself on the Short Sale Restricted (SSR) list today, however.
Now below all major short- and long-term moving averages, HOOD carries a 41.4% year-to-date deficit, with a new ceiling emerging at the $12 level. And though short interest has begun to unwind, it still represents 7.9% of the stock's available float.