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Robinhood earnings on tap: Here's what to expect

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Yahoo Finance’s Ines Ferre breaks down what to expect from Robinhood’s earnings report.

Video Transcript

BRIAN CHEUNG: Plenty of earnings releases on the menu after the bell. Today we've got Nvidia, Victoria's Secret, Bath & Body Works, but a lot of focus on Robinhood. Let's bring in Yahoo Finance's Ines Ferre with the breakdown on what to watch for when the numbers hit the tape later. Ines?

INES FERRE: And, Brian, we are watching this closely, since this company went public recently. So the Street's expecting a loss per share of $0.26 with revenue of $559.5 million. And what analysts will be paying attention to is payment for order flow, which represented 80% of the company's revenue in the first quarter. And this is where brokerages sell trades to market makers, who then execute those trades.

And are those payments shrinking, given the competition that the company has from E-Trade, from Charles Schwab, and also what's happening with crypto trading volumes? So if the volume for stocks has-- for trading stocks has dipped a little bit because in the first quarter it was so high, is that being made up by crypto volume trading? And so Matt Maley from Miller Tabak has said that one of the biggest questions will be about volumes. And everybody will be asking, what are you seeing as far as the company when it comes to volumes after the company went public not too long ago?

Just also to make note, there are not a lot of analyst ratings out there because of that 25-day quiet period after the IPO. So you do have three ratings out there. You've got two buys and one hold, with an average price target of $55 a share on the stock.

BRIAN CHEUNG: Ines, what could be really interesting and spicy, if you want to describe it like that, is that shareholders will apparently be able to submit questions on this earnings call. How might that kind of factor into the noise that we'll get when they report after the bell?

INES FERRE: Yeah, it is going to be a really interesting earnings call. I mean, this is a company that talks a lot about democratizing trading. And they have done that ever since their roadshow. You see it in everything that the company does.

And so this earnings call will be a little bit different, because the company is accepting questions from shareholders via a platform from Say Technologies. This is the company which Robinhood recently announced that it was acquiring. So you will be able-- shareholders are able to, ahead of the earnings call, to submit these questions. And the ones that are upvoted the most will be answered by management.

So it'll be really interesting to see. This has become a company which is very retail focused, of course. And we saw it with the stock as well, the volatility in the stock over the last couple of weeks being led by retail traders. So it's all about the retail traders. It's all about democratizing trading, as Robinhood likes to put it.

BRIAN CHEUNG: I mean, even upvoting in that system sounds so eerily similar to how Reddit operates. But I guess the jokes just keep rolling for these types of stocks. But Ines Ferre, again, thanks for that breakdown.