Chicago, IL – February 11, 2025 – Zacks Equity Research shares Robinhood Markets HOOD as the Bull of the Day and D.R. Horton, Inc. DHI as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Air Canada ACDVF, Controladora Vuela Compañía de Aviación, S.A.B. de C.V. VLRS, Golar LNG GLNG and United Airlines UAL.
HOOD’s run includes a 50% surge to start 2025. Robinhood stock is on the verge of surpassing its 2021 highs and breaking out to fresh records after its Q4 earnings release on Wednesday, February 12.
Robinhood has transformed from a free stock-trading app into a diversified online broker powerhouse competing for customers alongside the likes of Fidelity, Charles Schwab, and others.
Robinhood’s earnings outlook has surged. HOOD is projected to post impressive EPS and revenue growth in 2024 and 2025 as it establishes itself as a force in the digital financial age across stock trading, wealth management, cryptocurrencies and bitcoin, and beyond.
Robinhood was founded over a decade ago to help “democratize” finance and investing. The company launched its commission-free trading app in 2013 when many popular online brokers’ commissions were $7 to $10 per trade.
Robinhood’s success change the industry forever, helping force the biggest players in the space such as Fidelity, Charles Schwab, and E*TRADE to transition to commission-free trading.
Robinhood has transformed from a popular pandemic-era trading app into a legitimate rival to Fidelity, catering to a larger swath of investors and sophisticated traders with its growing portfolio.
Robinhood has rolled out retirement accounts, crypto trading, futures, options, and more. HOOD in October announced its Robinhood Legend, a browser-based desktop trading platform built for active traders.
Robinhood is also expanding into the robo-advisor and wealth management businesses. Meanwhile, Robinhood’s Gold service (which charges customers a small monthly fee), offers high APY on uninvested brokerage cash balances, retirement matching offerings, and more.
HOOD in November agreed to buy TradePMR, a custodial and portfolio management platform for Registered Investment Advisors (RIAs).
The new Trump administration’s pro-cryptocurrency outlook is expected to help boost Robinhood’s ability to expand its crypto ambitions. Wall Street is also glad Robinhood finalized its SEC settlement in January.
Robinhood went public in the summer of 2021 after the Covid pandemic helped energize a new generation of investors (young and old) to join the stock market.
The company posted 90% revenue growth in 2021 soaring from $958 million to $1.82 billion. HOOD faced a down year in 2022 as the market tumbled. But it returned to impressive growth in 2023 to top its FY22 total.
Flash forward to the third-quarter of 2024 and Robinhood grew its revenue by 36% YoY, driven by a 72% increase in “transaction-based revenues” such as options trading. Robinhood increased its total investment accounts by 1.5 million YoY to 25.1 million, with average revenue per user 31% higher.
Over the past twelve months ending in Q3 FY24, Robinhood’s net deposits jumped 45% (+$39.0 billion). HOOD's total “Assets Under Custody” climbed 76% YoY in Q3 to $152.2 billion, “driven by continued net deposits and higher equity and cryptocurrency valuations.”
Robinhood continues to make strides to win over active traders, with monthly active users up 7% to 11.0 million. Equity notional trading volumes jumped 65%, with options contracts traded up 47%, and crypto notional trading volumes 112% higher.
HOOD is projected to swing from an adjusted loss of -$0.61 a share last year to +$0.97 a share in 2024. Robinhood is expected to post 20% higher earnings in 2025.
Robinhood’s earnings outlook has surged over the last year, including roughly 20% jumps for FY24 and FY25 in the last few months. The stock trading company’s 2025 earnings outlook has climbed 372% in the last year.
Robinhood’s Most Accurate EPS estimates came in above consensus for Q4, FY24, and FY25. HOOD’s upward earnings revisions earn the stock a Zacks Rank #1 (Strong Buy), and it crushed our bottom-line estimate in three out of the past four quarters.
Meanwhile, Robinhood is projected to grow its revenue by 54% in FY24 and 22% in FY25 to hit $3.52 billion vs. $1.9 billion in 2023.
Robinhood stock surged 50% to start 2025, hitting new 52-week highs on Monday heading into its Q4 earnings release due out after the closing bell on Wednesday, February 12.
Robinhood’s recent run is part of a 370% surge during the last 12 months and 460% in the past two years to blow away its Financial-Investment Bank industry that ranks in the top 1% of over 250 Zacks industries.
HOOD stock is attempting to break out above its 2021 highs (outside of a huge short-term spike).
Robinhood might face selling pressure (even if it posts strong guidance on Wednesday) in the near-term if investors decide to take profits following its stellar performance.
Despite its surge to 52-week highs, Robinhood’s valuation is improving. HOOD trades at a 45% discount to its 12-month highs at 47.1X forward 12-month earnings.
Robinhood’s PEG ratio, which factors in its EPS growth outlook, sits at 0.75 vs. its top-ranked industry’s 0.93 and the Tech sector’s 1.74.
Any pullback to Robinhood’s 21-day (roughly $49.90 a share) or 50-day ($43.87) might offer investors and traders great buying opportunities.
D.R. Horton, Inc. stock has dropped 10% since DHI released its first quarter fiscal 2025 financial results on January 21. D.R. Horton’s earnings outlook is fading as the housing market slows.
Wall Street, D.R. Horton, and many others are waiting for the conditions to change to help reignite the housing market and home-building industry.
D.R. Horton has been the largest U.S. homebuilder by volume since the early 2000s. The Arlington, Texas-based company builds homes across 36 states and nearly 130 markets.
DHI’s various brands cater to different types of buyers at different stages of life and income brackets, with prices ranging from $200K to $1 million. D.R. Horton also offers mortgage financing, title services, and more.
D.R. Horton posted a blockbuster stretch of growth between 2012 and 2022, including 21% revenue growth in 2022 and 37% in 2021. The housing market has cooled off substantially since then. Soaring home prices and higher mortgage rates could hold back demand for the foreseeable future.
Prices and rates will likely have to come down a little bit more before home construction demand bounces back. DHI’s earnings outlook dropped following its Q1 FY25 release on January 21, with its FY25 estimate 7% lower and FY26’s consensus 8% off the pace. The recent downward revisions are part of D.R. Horton’s larger negative trend that began in the fall.
D.R. Horton’s negative EPS revisions earn the stock a Zacks Rank #5 (Strong Sell). DHI’s adjusted earnings are projected to slip 9% in FY25 on slightly lower sales.
DHI shares are down around 31% from their fall highs and investors might want to wait for some signs of life from D.R. Horton and the broader industry before they start buying.
Thankfully, D.R. Horton’s long-term outlook remains impressive. Millennials are driving the housing market, and home builders didn’t overbuild during the Covid boom, which means supply is still far below overall demand.
“The supply of homes at affordable price points is generally still limited, and demographics supporting housing demand remain favorable,” DHI Executive Chairman David Auld said in prepared remarks.
“Despite continued affordability challenges and competitive market conditions, incentives such as mortgage rate buydowns have helped to address affordability and spur demand. Additionally, given our focus on affordable product offerings, we have continued to start and sell more of our homes with smaller floor plans to meet homebuyer demand.”
Investors should keep D.R. Horton on their watchlists while looking elsewhere for stocks to buy now.
The majority of players in the widely diversified Zacks Transportation sector have already released fourth-quarter 2024 results. The percentage of companies beating earnings estimates is impressive so far.
Among transportation companies that are yet to report fourth-quarter numbers, we expect the likes of Air Canada, Controladora Vuela Compañía de Aviación, S.A.B. de C.V., popularly known as Volaris, and Golar LNG to report better-than-expected earnings despite weak freight demand, supply-chain woes and inflation-induced economic uncertainty.
Upbeat passenger volumes during the holiday season have been a huge positive, aiding the top-line performance of the airline companies in the space.
While air travel demand has remained strong on the leisure front, the fact that travel demand on the international front is upbeat has also helped. For example, Chicago-based United Airlines’ transatlantic bookings for 2024 winter were 30% higher than pre-COVID levels.
The solid growth in unit revenues is backed by consistent travel demand and benefits from the successful execution of tactical actions (which includes improving network optimization and capacity rationalization). The sharp reduction in airline seats in the U.S. market, which has driven up ticket prices, has boosted the top-line performance of carriers in the final quarter of 2024.
The fourth-quarter performance of transportation stocks has also been aided by prudent cost-management actions. To mitigate the ills associated with lackluster freight demand, many companies in the sector are cutting costs. Moreover, the fact that e-commerce is still a force to reckon with bodes well.
Quite a few transportation stocks are likely to report earnings shortly. It is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings.
While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.
Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Air Canada has been benefiting from the buoyant scenario with respect to air travel demand. Upbeat passenger volumes are likely to have aided the company’s fourth-quarter performance. ACDVF currently has an Earnings ESP of +79.46% and a Zacks Rank of 3. ACDVF is slated to report fourth-quarter 2024 results on Feb. 14.
ACDVF beat the Zacks Consensus Estimate in two of the last three quarters, missing the mark once. The average miss is 340.4%.
Volaris, based in Mexico, currently has an Earnings ESP of +4.27% and carries a Zacks Rank #3. Upbeat air travel demand is aiding the company. VLRS is slated to report fourth-quarter 2024 results on Feb. 24.
Despite capacity reduction due to engine inspections, the Mexican airline expects total revenues for 2024 to be close to 2023. The top line is likely to have been aided by an increase in base fares and ancillary revenue per passenger.
Demand is likely to have increased, with management stating that booking trends for the peak holiday season were robust. VLRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average being 159.5%.
Golar LNG, a shipping company, currently has an Earnings ESP of +11.58% and sports a Zacks Rank #1. GLNG is slated to report fourth-quarter 2024 results on Feb. 27.
The company’s performance in the to-be-reported quarter is likely to have been aided by the growing demand for floating LNG or liquefied natural gas. GLNG ranks first in terms of FLNG capacity. The FLNG market has been growing due to its economic viability and is expected to have witnessed significant capacity growth, particularly in Africa and North America. GLNG beat the Zacks Consensus Estimate in three of the last four quarters and missed the mark in the other quarter. The average beat is 30.2%.
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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS) : Free Stock Analysis Report
Golar LNG Limited (GLNG) : Free Stock Analysis Report
Air Canada (ACDVF) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
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