$HOOD Robinhood Markets Inc Deep Dive and 2024 Outlook

The stock broker is gaining transaction volume, and steadying profitability

Robinhood is a US-based financial services company known for its commission-free stock, ETF, and cryptocurrency trading through its mobile app. It was founded in 2013 by Vladimir Tenev and Baiju Bhatt and is headquartered in Menlo Park, California.

Their technology disrupts the traditional brokerage model by eliminating commissions and offering fractional shares, allowing users to invest any amount. Robinhood makes money by routing trades to market makers who pay them for order flow, raising concerns about best execution.

Robinhood offers additional features like margin investing (borrowing to buy securities), crypto wallets, a debit card with cashback rewards, and educational resources. Their revenue comes from payment for order flow, interest (on margin loans and cash balances), and subscription fees for Robinhood Gold (increased instant deposits and research).

The big questions for Robinhood:

1. Can Robinhood maintain its rapid growth in net deposits and assets under custody while also improving profitability?

2. How successful will Robinhood be in its international expansion efforts, such as in the UK and EU, and what will the financial impact be?

3. What regulatory challenges or scrutiny might Robinhood face in 2024 and how will it impact the business?

4. Can Robinhood continue to grow its active user base and trading volumes, especially in equities and options, to win market share from competitors?

5. Will Robinhood be able to increase wallet share with existing customers by growing its Robinhood Gold subscription service and new products like the Robinhood Credit Card?