Wolfe Research has moved Robinhood Markets (NASDAQ:HOOD) from a Peerperform rating to Outperform and established a $125.00 price target, saying the shares now present an "unmatched" risk-reward opportunity. The firm made the change as Robinhood's stock trades near $82.82, a level that follows a nearly 8% drop over the past week.
Wolfe noted the upgrade comes close to the one-year anniversary of its earlier downgrade of the stock. Despite that downgrade and the subsequent volatility, Robinhood has produced a roughly 48% gain over the previous year as its share price largely retraced to comparable levels while the company’s earnings outlook has shown signs of improvement, according to Wolfe.
In laying out its revised view, Wolfe Research recommended investors consider the recent pullback and the deterioration in sentiment toward the broader cryptocurrency ecosystem as factors that enhance the stock’s appeal. The firm identified several developments it regards as supportive of stronger earnings potential:
- Growth in earnings power tied to the emergence of Prediction Markets.
- An expanded international footprint that could widen addressable markets.
- A more robust and broader product offering across the platform.
Wolfe presented its analysis in a frequently asked questions format to explain its updated outlook for the financial technology company.
Other brokerages and analysts have also weighed in recently, offering a range of perspectives. Barclays flagged concerns about Robinhood ahead of its upcoming earnings report, noting that investor sentiment has become more positive in the wake of the stock’s recent price declines. Truist Securities modified its price target to $130 and cited worries about lower cryptocurrency prices, while continuing to carry a Buy rating on Robinhood.
Separately, the reporting on Truist included a separate note that, despite a 10% drop in Robinhood’s shares, the firm continued to support the stock with a reiterated Buy rating and a $155 price target. Bernstein has maintained an Outperform rating even as the shares have fallen about 21% year to date, listing a $160 price target. Mizuho remains constructive as well, keeping an Outperform rating and assigning a $172 price target while highlighting the company’s expansion in the U.K., which includes a new stocks and shares ISA with no platform fees and a 2% cash bonus.
Collectively, these analyst actions reflect divergent views on Robinhood’s near-term prospects amid a challenging market environment. While Wolfe Research emphasized the upside tied to product initiatives and international growth, other firms pointed to headwinds such as weaker crypto prices and near-term earnings uncertainty as reasons for caution.
Summary
Wolfe Research upgraded Robinhood to Outperform with a $125.00 price target, citing an attractive risk-reward. The stock trades near $82.82 after a recent pullback but is up about 48% over the past year. Multiple other firms have issued divergent ratings and price targets as the company faces mixed near-term signals.
Key points
- Wolfe Research upgraded HOOD from Peerperform to Outperform and set a $125.00 target - impacting the fintech and equity markets.
- Wolfe cites increased earnings potential from Prediction Markets, a wider international footprint and a broader product slate - relevant to digital brokerage and retail investing sectors.
- Other brokers offer varied views and targets, reflecting uncertainty in crypto prices and investor sentiment - affecting cryptocurrency-linked revenues and market expectations.
Risks and uncertainties
- Deteriorating sentiment in the broader cryptocurrency ecosystem could weigh on revenue streams tied to crypto activity - risk to fintech and crypto markets.
- Near-term earnings uncertainty surrounding the company as analysts await the upcoming earnings report - risk to equity valuations.
- Divergent analyst price targets and ratings signal differing views on growth execution and international expansion - risk to investor consensus and market clarity.