📈 Stock Picks
$HOOD (Robinhood Markets Inc)
📆 Publicly traded since 2021
💰 Specializes in facilitating stock trading
📍 Headquarters in Menlo Park, California
Financial Green Flags
Based on Quarterly Earnings Report:
✅ Beat EPS expectations by 99.1%
✅ Beat revenue expectations by 6.54%
✅ Net income is up 2953% Year-over-Year (not a typo)
✅ Diluted EPS are up 2425% Year-over-Year (also not a typo)
Things to Consider
💡 According to Morgan Stanley, Robinhood's new events contracts business (e.g., markets for March Madness this month and bets on egg prices, job data, and highest daily temp in NYC later on) could add up to $260M in new revenue per year, supercharging its earnings by 14%.
💡 Over the last three quarterly earnings reports, the company has consistently grown its revenue, net income, and EPS. Also, number of funded customers increased by 310,000 in December 2024 alone, demonstrating solid user growth.
The Bottom Line
At first glance, the company's net income and EPS financials look like typos. But nope. They are legit. With growth like that and a clear plan to expand its business into events contracts, Robinhood is positioned to significantly increase its revenue in the short-term and establish itself as a market leader in the long-term.
$KLAR (Klarna)
📆 Founded in 2005 (not yet publicly traded)
💰 Specializes in payment processing for e-commerce
📍 Headquarters in Stockholm, Sweden
Financial Green Flags
Based on financial reports:
✅ Revenue increased by 24% to $2.8B in 2024
✅ Adjusted operating profit was $181M in 2024, up from a loss of $49M in 2023
Things to Consider
💡 Klarna will now be the exclusive provider of "buy now, pay later" services for Walmart, basically stealing the partnership away from competitor Affirm. The company also partnered with DoorDash to let customers "eat now, pay later."
💡 VERY IMPORTANT: Klarna recently filed for a U.S. IPO (initial public offering). The date is not set yet. Based on recent developments, there is reason to speculate that the stock will perform well. However, keep in mind that stocks are very volatile within the first days of them going public. It's good practice to first monitor the stock's performance and then consider going in once the dust settles.
The Bottom Line
It's risky to invest in a stock when it's fresh on the public market, but there is also potential upside. Based on the limited financial data we have access to, the company seems to be in a decent spot. And let's not forget them stealing business from Affirm (pretty alpha of them). We'll definitely be keeping a close eye on this company and might even throw down some cash if a sustained upward trend develops post-IPO
