Robinhood Stock Soars 192.5% in 2024 Amid Diversification Push

MENLO PARK, Calif. — Robinhood Markets Inc. (HOOD) saw its stock surge 192.5% in 2024, marking a dramatic turnaround for the trading platform that has faced intense scrutiny in recent years. The company’s success has been driven by its efforts to diversify offerings, attract more investors, and expand its retirement account services.

As of November 2024, Robinhood reported 24.8 million funded customers, a 6% year-over-year increase. More notably, the company’s assets under custody (AUC) — the total assets it manages on behalf of customers — skyrocketed to $194.6 billion, a 106% jump from the previous year. This growth has been fueled by its Robinhood Gold subscription service, which offers an annual percentage yield of up to 5% and has proven popular among active users.

“Gold subscribers generate significantly more average revenue per user and adopt retirement accounts five times as often,” said Robinhood CFO Jason Warnick. The $5 monthly subscription service has become a key revenue driver, with Gold members contributing to the platform’s recurring income and higher engagement rates.

Robinhood has also made significant strides in expanding its retirement account offerings. The company now provides traditional individual retirement accounts (IRAs) and Roth IRAs, with contribution matches of up to 3% for Gold members. Since the third quarter of 2022, the number of customers with retirement accounts has grown from 390,000 to 940,000, while AUC in these accounts surged from $1.1 billion to $9.9 billion.

The company’s financial performance has been robust, with four consecutive quarters of profitability. Robinhood has also introduced new products, including Robinhood Legend, a desktop suite of investing tools, and plans to offer index options and futures. Despite its stock trading at 73 times earnings and 29.5 times forecasted earnings, analysts view Robinhood as a compelling option for growth-focused investors.

Robinhood’s ability to navigate challenges and innovate has positioned it as a major player in the fintech space. With a strong capital base and a growing customer base, the company is poised to continue its upward trajectory in 2025.