Needham analyst John Todaro initiated coverage on Robinhood Markets Inc (NASDAQ:HOOD) with a Hold rating.

The analyst views HOOD's revenue diversification as positive, as the company captures higher interest income in bear markets and high transaction revenue in bull markets amid lower interest rate scenarios. 

The analyst thinks HOOD will achieve positive adjusted EBITDA ahead of its schedule and launch new products, such as Gold, with a lowered headcount. 

However, the analyst notes a continued decline in crypto trading volume and uncertainty around "retail stock trader" return on MAUs.

Also, the company's targeted customer is a small part of the total investing universe, and its crypto products are limited vs. its peers, says the analyst.

The analyst estimates EPS of $(0.09) vs. consensus of $0.04 in Q3, $(0.07) vs. consensus of $0.02 in H2 2023, and $0.13 (vs. street view of $0.15) in 2024.

The analyst estimates revenue of $1.899 billion in FY23 and $2.143 billion in FY24. 

Also Read: EXCLUSIVE: 'Next Generation Of Investors' Drives Robinhood's 24/7 Trading, Crypto, Savings Offerings

Price Action: HOOD shares are trading lower by 3.19% at $9.72 on the last check Wednesday.