Robinhood's Stock Tumbles After Earnings Miss, While JMP Analyst Remains Bullish

• Robinhood shares tumbled more than 10% in premarket trading on Thursday following its third-quarter earnings report.
• JPMorgan said the negative reaction was unsurprising given the stock's outperformance this year.
• Broker JMP raised its Robinhood price target to $33 from $30 and remained bullish on the stock.

Robinhood (HOOD) shares slumped more than 13% on Thursday after the popular platform missed Wall Street's expectations for the third-quarter earnings. Still, one analyst is brushing off the negative reactions and remaining bullish on the stock.

The company missed many important revenue metrics, including "account growth, new net assets, trade pricing, new gold account subscriptions," the Wall Street banking giant JPMorgan said in a note. Still, it is managing expenses well, which supported earnings per share (EPS) for the quarter, the bank's analysts said.

JPMorgan viewed the quarter as a "seasonal deceleration in the business after a robust 1H24 with record net deposit growth." It cut its price target on the shares to $20 from $21, while maintaining its underweight rating on the stock.

JPMorgan said Robinhood reported net deposits of $10 billion in the third quarter, the lowest quarterly figure this year and below the bank's estimate of $11.2 billion.

Citi (C) said that despite Robinhood's positive commentary for October, it expects the shares to come under pressure due to a top-line miss and recent outperformance. The bank has a neutral rating on Robinhood stock with a $23 price target.

However, one Wall Street broker, JMP, stayed positive on the stock, saying Robinhood's earnings were in line with its estimates and just a bit shy of consensus.

The broker said that the initial weakness in the shares was a "knee-jerk reaction," as it maintained its bullish outlook on the company and raised its price target to $33 from $30. JMP maintained its rating on the stock at market outperform.

UPDATE (Oct. 31, 13:22 UTC): Updates share price performance, story throughout.