Robinhood stock price has rebounded in the past two weeks as the US stock and crypto market bounced back. HOOD, a top player in the financial services industry, has jumped to a high of $51, its highest level since March 3. It has rallied by 65% from its lowest level this month as focus shifts to the upcoming quarterly earnings.
Robinhood’s growth has continued
Robinhood is a top company in the financial industry, offering a platform that enables users to buy stocks, exchange-traded funds (ETF), options, and cryptocurrencies.
It is a game-changer that has disrupted the brokerage industry by introducing commission-free trading. The company also introduced 24-hour trading, a trend that is gaining popularity in the US.
These solutions have made it one of the biggest players in the brokerage industry. It has over 25.7 million funded customers and 11 million active users. The company has $187 billion in assets under custody. These are huge numbers since it had over 23.4 million in Q4’23, while its AUC stood at $103 million.
Robinhood’s business has also benefited from its subscription service, which has continued to add customers. The number of active subscribers rose from 1.42 million in Q4’23 to 2.64 million in Q4’24.
HOOD earnings ahead
The next important catalyst for the HOOD stock price will be its financial results, which will come out on Wednesday. Analysts expect these numbers to show that its business thrived in the first quarter, helped by Trump-induced volatility.
The average estimate is that its revenue will be $917 million, a 48% increase from the same period last year. More data is expected to show that its earnings per share (EPS) will be $0.37, up from $0.24 a year earlier. Analysts expect the annual results to be $3.66 billion, representing a 23.8% increase from 2023.
Read more: Robinhood stock price has a 42% upside but faces key risks
These numbers mean that its business is doing well, as its revenue stood at just $958 million in 2020. If the yearly estimates are accurate, it means that its revenue has jumped by 280% in the last few years.
Robinhood also has a solid balance sheet, with over $4.33 billion in cash and equivalents and $4.7 billion in segregated funds. Its current account stands at over $25 billion.
A key concern is that the company is overvalued, given its market capitalization of over $43 billion and a forward price-to-earnings ratio of 39. This valuation makes it highly valued than other companies in the fintech industry.
The benefit, however, is that it can justify this valuation by its growth and market share in the stock and crypto market. Wall Street analysts see an upside for the stock as they expect it to hit $58 from the current $48.
Robinhood stock price analysis
HOOD stock chart | Source: TradingView
The daily chart shows that the HOOD share price bottomed at $29.80 earlier this month as the trade war continued. Its lowest level this month was its lowest point since November 8, 2023.
It has now bounced back, moving from this month’s low of $29.8 to $48.9. This rebound happened as it formed a W chart pattern, a popular bullish sign.
The stock has moved above the 50-day Exponential Moving Average (EMA) and is between the 23.6% and 38.2% Fibonacci Retracement levels. Therefore, the stock will likely have a strong bullish breakout in the coming days, with the next point to watch being at at $60, up by 22% from the current level.
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