Bernstein Analyst Comments on Robinhood's (HOOD) Credit Card

March 27, 2024 7:26 AM EDT
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Bernstein analyst Gautam Chhugani discussed Robinhood's (NASDAQ: HOOD) new credit card in a note to clients.

The analyst commented, "Just a few hours back, HOOD launched its Gold credit card (HOOD share price was up 5% post market). The credit card offers 3% cashback on everything. The card has no annual fee, no fx fee but requires Robinhood Gold membership ($5/month). This is not just about credit card, but HOOD’s rather smart strategy to acquire sticky assets and maximizing ARPU/wallet. Some key takeaways from the launch…"

"Want this attractive credit card? Move your assets to our Gold program: Hood is offering the credit card exclusively to its GOLD subscription users (Exhibit 1). HOOD has grown Gold users by 25% YoY (~$85mn ARR, Exhibit 3). HOOD’s total assets have grown 66% YoY. Feb's assets stood at $118bn, up 18% MoM. In addition, HOOD offers a 1% boost to users who deposit assets from other platforms, but subject to 5 year hold in Gold plan. HOOD’s revenue yield at 2.1% p.a more than covers the costs of acquisition. Thus, offering a disruptive credit card, in our view, is an asset acquisition & wallet maximization strategy."

Bernstein has an Outperform rating and $30.00 price target on Robinhood Markets (NASDAQ: HOOD).

For an analyst ratings summary and ratings history on Robinhood Markets click here. For more ratings news on Robinhood Markets click here.

Shares of Robinhood Markets closed at $19.28 yesterday.

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