Following Robinhood's nearly 12% stock drop after missing its first-quarter earnings and revenue estimates, several big investors and Wall Street analysts remain confident in the company's prospects. Cathie Wood's Ark Invest acquired approximately $39.7 million worth of Robinhood shares after the earnings miss, demonstrating faith in the trading platform's potential. This move aligns with the views of Wall Street analysts, who consider the earnings miss a temporary setback and point to early April data indicating improving momentum in equity and options trading volumes.
Cantor Fitzgerald and Compass Point have expressed similar optimism, with the former reiterating its 'Overweight' rating and $110 price target, and the latter maintaining a 'Buy' rating with a slightly reduced price target of $107. Although some analysts caution about risks, particularly in crypto trading, others like Bernstein's analysts are bullish, anticipating stabilization in crypto activity and growth in new revenue streams such as prediction markets. Robinhood's planned prediction markets platform, Rothera, is seen as a potential driver of future revenue and margin expansion.