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Robinhood jumps after robust growth in assets under custody in February

Published 03/14/2024, 07:06 AM
Updated 03/14/2024, 09:40 AM
© Reuters. FILE PHOTO: The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021.  REUTERS/Andrew Kelly/File Photo
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(Reuters) -Robinhood Markets shares climbed nearly 9% on Thursday after the brokerage reported strong growth in assets under custody for the month of February, signaling continued boost from a comeback in cryptocurrency and stock trading.

Assets under custody (AUC) grew 16% month-over-month to $118.7 billion at the end of February, the company's second consecutive month of breaching the $100 billion mark.

The Menlo Park, California-based company had reported $102.6 billion in AUC for the fourth-quarter ended Dec. 31, its highest since the meme stock trading frenzy in 2021.

Bernstein on Thursday began coverage on Robinhood (NASDAQ:HOOD) with an "outperform" rating on expectation that the company's cryptocurrency revenue would grow nine-fold in 2025, and added that its "full suite crypto offering within a regulated broker platform is in a sweet spot."

Bernstein expects total market value of the cryptocurrency industry to reach $7.5 trillion in 2025 from about $2.6 trillion currently.

The brokerage said Robinhood had an advantage over other crypto exchanges such as Coinbase (NASDAQ:COIN) due to competitive fees, and as traditional brokers stay away from offering crypto trading services.

In mid-February, Robinhood reported a surprise quarterly profit and said it aims to deliver 'profitable growth' in 2024.

Robinhood has benefited from the increased activity from retail traders - its main client base - as bitcoin surpassed the record high of 2021 and climbed above $73,000, and the S&P 500 hit a series of all-time highs this year.

© Reuters. FILE PHOTO: The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021.  REUTERS/Andrew Kelly/File Photo

It has been contending with a decline in active users on its platform in recent quarters, but has managed to grow revenue per customer.

Robinhood shares hit a fresh 2-year high on Thursday, but remain well below their July 2021 IPO price of $38.

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