Robinhood (HOOD) delivered a strong Q2 performance, surpassing analysts’ expectations with higher revenue and a surge in crypto trading activity. Despite this bullish data, Wall Street analysts held back from issuing rating upgrades, suggesting that the stock’s recent rally has already priced in much of the expected growth.
Stock Rallies 420% Year-Over-Year
HOOD stock is now trading around $106.50, nearly three times higher than its April lows, and up an impressive 420% compared to last year. While these numbers reflect robust investor confidence, analysts believe the rapid climb could limit near-term upside.
Analysts increased price targets, but withheld rating upgrades, signaling cautious optimism.
Price Targets Raised, But Ratings Stay Neutral
- Citigroup raised its price target to $120, maintaining a neutral rating, and noted that future growth may already be baked into the price.
- JPMorgan lifted its target to $104, citing an “almost ideal operating environment” with high retail activity, market volatility, and interest income.
- KBW adjusted its target to $106, highlighting a crypto rebound driven by Bitstamp’s trading volume and better securities lending margins.
- Cantor Fitzgerald, the only firm with a buy rating, raised its target to $118, citing continued expansion into crypto staking, margin interest, and the upcoming Robinhood Banking product.
Robinhood reported $160 million in crypto revenue, representing 16% of its total, driven by $6.7 billion in Bitstamp-related volume.
Implications for Coinbase Earnings
Robinhood’s results may offer early signals for Coinbase (COIN), which is due to report earnings later today. Both platforms benefit from retail and institutional crypto engagement, but Coinbase lacks Robinhood’s diversified income streams such as interest revenue and securities lending.
If Coinbase sees a similar return of retail traders, it could signal a broader crypto market rebound.
Final Thoughts
Robinhood’s second-quarter earnings underscore its strength in adapting to shifting market dynamics, especially through crypto expansion. However, analysts are waiting for sustained momentum across all business segments before revising their long-term ratings.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.