• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

Piper Sandler raises Robinhood’s rating to ‘Overweight’ and price target to $23: Should you buy?

by August 12, 2024
written by August 12, 2024

Piper Sandler has upgraded Robinhood Markets (NASDAQ: HOOD) to an “Overweight” rating from “Neutral,” and increased their price target from $20 to $23. 

This adjustment suggests a potential upside of over 28% from the stock’s current trading price, presenting an attractive entry point after a 27% pullback from its 52-week high on July 16. 

This bullish outlook reflects optimism about Robinhood’s prospects amidst ongoing market fluctuations.

Strong Q2 performance boosts investor confidence

Robinhood Markets reported impressive financial results for Q2, surpassing both revenue and earnings expectations. 

The company achieved a GAAP EPS of $0.21, exceeding estimates by $0.06, and generated $682 million in total revenue, marking a substantial 40% increase year-over-year. 

Key drivers of this growth include a 43% rise in options revenue and a remarkable 161% surge in cryptocurrency revenue. 

Additionally, net interest revenue grew by 22% year-over-year, attributed to increased interest-earning assets and higher short-term interest rates.

Despite these positive financial indicators, Robinhood saw a drop in monthly active users, declining from 13.7 million to 11.8 million. 

This decrease reflects challenges in user engagement amid a volatile market environment.

Analyst upgrades and market sentiment

Recent upgrades from other analysts further reflect a mixed but generally positive outlook for Robinhood. 

On August 5, 2024, Citi upgraded the stock to “Neutral/High Risk” from “Sell/High Risk,” citing improvements in deposits and trading activities following a 12% slump in the stock. 

Similarly, Wolfe Research upgraded Robinhood to “Outperform” on June 26, 2024, forecasting a robust +30% GAAP EPS growth supported by strong net deposit and account growth.

However, there remains some caution among analysts regarding potential headwinds. 

Concerns about interest rate cuts could pressure Robinhood’s net interest income, contributing to a mixed consensus on the stock’s future performance.

Robinhood’s expansion into cryptocurrency trading

Robinhood’s recent strategic moves underscore its growth trajectory. 

The company’s expansion into cryptocurrency trading and its acquisition of Bitstamp enhanced its market presence, particularly in Europe and Asia. 

Bitstamp’s global footprint and compliance track record provide Robinhood with a strategic advantage in these regions.

Additionally, the acquisition of Pluto Capital is expected to bolster Robinhood’s AI capabilities, offering more personalized investment strategies and potentially increasing user engagement and retention. 

These developments align with Robinhood’s focus on product innovation and market expansion, crucial for attracting and retaining users.

Currently, Robinhood’s forward Non-GAAP P/E ratio stands at 23, higher than the sector median, reflecting the market’s anticipation of the company’s growth potential. 

However, some analysts view this valuation as contentious, citing risks related to Robinhood’s reliance on interest income.

The primary risk involves potential interest rate cuts, which could impact Robinhood’s net income given its significant revenue derived from interest. 

Additionally, volatility in cryptocurrency trading volumes presents another risk, potentially affecting transaction revenues.

Can remain weak in the medium term

Following its much-celebrated IPO in July 2021, Robinhood’s stock made an all-time high above $80 immediately and then crashed 90% to below $9 by July 2022. Then, the stock largely remained rangebound between $8 and $14 for more than a year.

HOOD chart by TradingView
After retesting its support below $8 in November 2023, the stock witnessed a rapid threefold surge to above $24 last month. Since then it has retraced significantly and broken below its medium-term bullish trendline as can be seen in the charts.

Although the stock has bounced back above that trendline in the last few days, it remains weak on the medium-term charts. Most indicators in the medium term have turned negative and are turning red on the longer-term charts.

Considering that investors who continue to remain bullish on the company, but have not initiated a long position yet, must wait for it to cross above the 100-day moving average and the MACD indicator on the daily timeframe to turn positive before initiating fresh long positions.

Traders who continue to remain bearish on the stock must try to short it closer to the $20 level with a stop loss at the recent high of $21.30. If the bearish momentum remains the stock will find it hard to trade above $20 and can again retest support near $14 where one can book profits.

The post Piper Sandler raises Robinhood’s rating to ‘Overweight’ and price target to $23: Should you buy? appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
UK competition watchdog to review $35 billion Synopsys-Ansys merger: What’s at stake?
next post
India’s Adani Group shares lose $2.4 billion after new Hindenburg report against SEBI chair

related articles

Asian markets close: Nikkei, Kospi down; Sensex closes...

May 19, 2025

Qualcomm unveils AI chips for data centres with...

May 19, 2025

Best crypto to buy now: Bitcoin Pepe leads...

May 19, 2025

JPMorgan cuts Netflix rating, citing balanced risk-reward post-rally;...

May 19, 2025

Bitcoin ETF open interest dips 5% to $29.47B...

May 19, 2025

US stocks slip in the red on Monday:...

May 19, 2025

Should Klarna IPO remain on watch list after...

May 19, 2025

Why this brokerage downgraded UnitedHealth’s rating to ‘hold’

May 19, 2025

Nvidia opens NVLink Fusion ecosystem, expands Taiwan footprint...

May 19, 2025

Cathie Wood says Trump’s tariffs could unlock tech...

May 19, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Biden missing in action as Turkey inches closer to full-blown war against US-allied Kurds in Syria

    December 20, 2024
  • Dogecoin and the Shiba Inu: Dogecoin is recovering 

    July 24, 2024
  • Encircling Taiwan was a smokescreen for China’s real goal of convincing US not to intervene, expert says

    October 20, 2024
  • No 2 Republican Steve Scalise lays out government funding strategies, with fiscal deadlines looming

    January 29, 2025
  • Trump’s ‘great time to buy’ post sparks market manipulation claims: calls for probe grow

    April 11, 2025

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 3

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 4

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (4,734)
  • Investing (624)
  • Stock (775)

Latest Posts

  • Mastercard jumps after Q2 earnings, is ’embedded finance’ the future?

    July 31, 2024
  • Who is Susie Wiles, Trump’s White House chief of staff? 5 things to know

    November 8, 2024
  • Interport Crypto (ITP): Investment Insights and Scam Alerts

    July 18, 2024

Recent Posts

  • Oil and natural gas: Oil fell to a new low this morning

    July 10, 2024
  • US and Iran clash over uranium enrichment as nuclear talks resume in Rome

    May 23, 2025
  • Potential 2028 hopeful accused of ‘inciting violence’ after call for ‘mass protests’ against Trump

    April 29, 2025

Editor’s Pick

  • President-elect Trump announces Pam Bondi as his new pick for US attorney general

    November 22, 2024
  • Impact of Trump’s Tariffs on Asian Economies

    February 3, 2025
  • U.S. markets close sharply lower — but some economists say economy looks stable

    August 6, 2024
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock