Robinhood reports disastrous earnings, stock plunges after hours

Yahoo Finance's Jared Blikre reports on Robinhood earnings and how the stock is performing.

Video transcript

JARED BLIKRE: Adam, this is a disaster-- missing almost every single key metric here. You can see the stock down 10% in afterhours trading. I want to get straight to the numbers. Net revenue came in light, $362.7 million short of the Wall Street estimate of $370.9 million. Net interest revenue also came up light, $63.4 million versus $66.3 million expected. Loss per share was wider than expected, $0.49 on a GAAP basis versus $0.39 expected. And their transaction-based revenue was $263 million. And that was short of the Wall Street estimate of $269 million.

Also, monthly active users, only 17.3 million, more than 2 and 1/2 million short of the Wall Street estimate of 19.9 million. And then their guidance also falling short. They see first quarter revenue below $340 million. The estimate was for $447 million. That is a huge shortfall. And then when you look at their crypto revenue, that was a big source of strength for them early on. That only came in at $48 million. That was shy of the Wall Street estimate of $55 million.

So no matter how you slice and dice this report, not very good numbers here. And I just want to chart the price action on a year to date basis. This stock is down 34%. And you look at a max chart from its IPO last year. You can see it's been nothing but, except for the first day here, a slow, steady decline. And we were closing at, I believe, a record low today. And we're probably going to see record lows tomorrow as well. So just to sum it up here, missing on all of the key metrics that I just went through, Robinhood.

ADAM SHAPIRO: Let's talk about this, Scott. I don't want to get you in trouble with your compliance officer, so if you're not allowed to talk about a specific stock, don't. But the question I have with Robinhood-- and it's about no-fee trading platforms-- is this going to go the way of the metric system conversion in the United States circa 1976? It's there, but nobody does it.

SCOTT CROWE: Yeah, I think what we've seen is, you know, if you look at this sell-off, it's really being led by the high flyers, by the crypto, by the Robinhoods, by a lot of the tech companies that aren't making money. So, you know, eventually, a company needs to turn a profit. And when the Fed stops making money free, that's when people start paying attention. So I think there is going to continue to be pressure on companies that aren't profitable, that investors see a path to a bottom line.

And so that's why I think that even though some of these stocks like Robinhood have sold off the most, they're probably not the best things to buy. You're better off buying companies that have secular growth backing them, but have also sold off, but have earnings and have income and are able to turn a profit. That's where I'd be focusing my attention, not on the Robinhoods that have really taken on the chin, but I think it's going to be hard for them to come back.