Robinhood Stock Sinks as Promotions Hurt Earnings

21 minutes ago

Robinhood Markets (HOOD) shares sank 15% Thursday, a day after the online brokerage posted worse-than-expected results as a promotion to get more customers affected performance.

The company posted third-quarter earnings per share (EPS) of $0.17, with revenue jumping 36% year-over-year to $637 million. Both were short of consensus forecasts by analysts polled by Visible Alpha.

Robinhood said that revenue was reduced by $27 million "due to matches paid to customers on transfers and deposits." CFO Jason Warnick said in the earnings call that these "contra revenues" are anticipated to grow sequentially by a similar amount in the current quarter, before slowing next year, according to a transcript provided by AlphaSense.

Warnick noted that the company's gold deposit boost "has not driven as much incremental customer activity as our other promotions." Still, Robinhood noted that an increase in gold subscriptions was the primary reason its "other revenues" gained 42%. Transaction-based revenues were up 72% on higher options, cryptocurrency, and equities trades. Net interest revenues climbed 9%.

Shares of Robinhood Markets fell from a nearly three-year high, but even so, they’re up almost 90% year-to-date. They got a boost earlier this week when the company announced it was offering clients the ability to trade on the outcome of the U.S. presidential election.

–Bill McColl

Microsoft Stock Slumps on Disappointing Forecast

1 hr 33 min ago

Shares of Microsoft (MSFT) slid on Thursday after the company’s revenue forecast fell short of Wall Street’s estimates and the cloud computing giant struggles to meet demand. 

Shares were down nearly 6% Thursday morning, weighing on the shares of some of its Big Tech peers. The slump slashed the stock's year-to-date gain—once as high as 24%—to just 8%.

Microsoft on Wednesday forecast revenue at its Intelligent Cloud division would grow 18% to 20% in the current quarter, below analysts’ estimates. Growth of Azure, its cloud-computing platform, is expected to come in around 31% or 32%, a deceleration from the most recent quarter and slightly slower than Wall Street expected. The disappointing forecast overshadowed the company’s fiscal first-quarter results, which broadly exceeded expectations. 

Microsoft has struggled to meet surging AI demand, a difficulty executives expect to persist in the current quarter. CFO Amy Hood on the company’s earnings call expressed confidence that growth would pick up in the first half of next year as more cloud computing capacity came online.

Analysts on Thursday were sanguine about the outlook. They pointed to comments from executives indicating demand for AI services remains strong, and that the company’s increased spending on AI infrastructure should help it to meet that demand in the future. 

Read the full article here.

–Colin Laidley

Peloton Soars After Strong Results, Naming of CEO

2 hr 47 min ago

Shares of fitness company Peloton Interactive (PTON) soared 25% in early trading Thursday after its fiscal first-quarter results topped analysts’ estimates and it appointed Ford executive Peter Stern as its new CEO.

Peloton reported a net loss of just $1 million, an improvement of $158 million year-over-year and much narrower than the $51.7 million loss expected by analysts polled by Visible Alpha. Revenue of $586.0 million also surpassed projections.

Stern, who currently serves as president of Ford Integrated Services and previously was an executive at Apple (AAPL), will begin his new roles on Jan. 1. In May, Peloton announced Barry McCarthy was stepping down as CEO and that the board had “initiated a comprehensive search process” to find its next leader.

With today's surge, Peloton has gained 35% in 2024, far outpacing the S&P 500's gains.

–Rob McLean

Uber Stock Plunges as Q3 Bookings Numbers Disappoint

3 hr 8 min ago

Uber Technologies (UBER) shares fell sharply early Thursday after the ride-hailing giant posted weaker-than-expected gross bookings in the third quarter.

The company said gross bookings rose 16% year-over-year to $41 billion in the third quarter, below estimates from Visible Alpha of $41.3 billion. Trips grew 17% to 2.9 billion, in line with estimates. 

Uber’s top- and bottom-line results handily beat analysts’ estimates, however. The company reported revenue for the period of $11.19 billion versus the $10.98 billion estimate. Net income of $2.6 billion also beat estimates by a wide margin, although that included a $1.7 billion pre-tax benefit from gains in Uber’s revaluation of its equity investments.

Uber CEO Dara Khosrowshahi noted that the company is continuing “to advance our autonomous strategy.” Uber has announced a number of partnerships with autonomous vehicle companies like Waymo over the last several months.

Uber shares were down 9% in recent trading. The stock, which hit a record high three weeks ago, has gained 17% since the start of the year.

–Nisha Gopalan

Carvana Levels to Watch as Stock Surges After Earnings

4 hr 41 min ago

Carvana (CVNA) shares soared in premarket trading after the online car dealer blew past Wall Street’s third-quarter earnings estimates and raised its full-year outlook.

The stock has recently reclaimed the 200-week moving average and sits poised to break out above the upper trendline of a rising wedge pattern. The stock was up 19% at around $246 about 45 minutes before Thursday's opening bell.

Investors should monitor key overhead price levels on Carvana's chart around $240, $300, and $365.

During retracements, investors should closely monitor the $165 level, a location where the shares would likely attract buying interest near the September 2020 pullback low and January 2022 countertrend high.

Read the full technical analysis piece here.

–Timothy Smith

Stock Futures Point to Lower Open for Major Indexes

5 hr 18 min ago

Futures tied to the Dow Jones Industrial Average were down 0.5%.

S&P 500 futures were down 0.7%.

Nasdaq 100 futures were off 0.8%.

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