Cathie Wood Buys the Dip in Robinhood Stock (HOOD) Post Q1 Earnings
Cathie Wood’s ARK Investment Management is once again making headlines by buying the dip in Robinhood Markets Inc. (HOOD) following the company’s first-quarter earnings release. Despite beating Wall Street estimates, Robinhood shares fell over 5%, creating a fresh entry point for the aggressive growth investor.
- This move reflects Wood’s continued conviction in fintech innovation, even amid market volatility.
- Her buying activity is viewed as a vote of confidence in Robinhood’s long-term fundamentals.
ARK Loads Up on HOOD
On May 1, ARK Invest ETFs added 210,700 HOOD shares worth approximately $9.8 million, reaffirming a pattern of accumulating Robinhood stock over the past two months.
- In April, ARK purchased 36,250 shares valued at $1.39 million.
- In March, the firm acquired 143,855 shares for about $5.6 million.
These acquisitions underscore Wood’s strategy of doubling down on high-potential disruptors during short-term pullbacks.
HOOD’s Q1 Earnings Snapshot
Robinhood posted stronger-than-expected Q1 earnings on April 30, with an EPS of $0.37, beating the consensus estimate of $0.32, and marking a 106% year-over-year increase.
- Total revenue hit $927 million, exceeding the forecast of $922.53 million and rising 50% from Q1 2024.
- Despite the positive numbers, the stock declined due to investor concerns around crypto trading softness and shrinking margin balances.
These dynamics highlight a disconnect between financial performance and investor sentiment, common in volatile growth stocks.
Analysts’ Views Post HOOD’s Q1 Earnings
Following the earnings report, analysts had mixed reactions, acknowledging strong growth but warning of potential headwinds in coming quarters.
- John Todaro of Needham cut his price target to $58 from $62, while maintaining a Buy rating.
- He praised solid stock and options trading volumes and noted that Robinhood’s Gold card user base doubled from 100,000 to 200,000.
However, Todaro also cautioned that crypto volumes dropped in Q1 and projected a further 48% decline in Q2, mirroring trends across the crypto sector.
- He also reduced his interest income forecast due to expected rate cuts, although higher trading activity could offset some of the loss.
Cathie Wood’s Long-Term Bet on Robinhood
Cathie Wood’s continued investment in Robinhood signals her strategic focus on disruptive platforms that aim to democratize finance and attract younger investors.
- Her bullishness suggests she views Robinhood as a core fintech holding with long-term upside.
- By buying during dips, ARK Invest shows a high-conviction, high-risk approach aligned with long-term innovation themes.
