Robinhood Markets Inc. (HOOD) is experiencing a wave of positive sentiment from analysts after the company delivered strong second-quarter financial results.
Piper Sandler analyst Patrick Moley upgraded Robinhood from Neutral to Overweight on Monday, raising the price target from $20 to $23. Moley believes the recent pullback in the stock price presents a compelling opportunity for investors to buy into an innovative and rapidly growing brokerage platform. He expects future rate cuts to have minimal impact on net interest income due to anticipated increases in trading activity and margin loan growth. Moley also anticipates the company to benefit from the launch of a new web-based trading platform and the introduction of index options and futures trading later this year. Looking ahead, Piper Sandler believes Robinhood is well-positioned for long-term success driven by global retail trading growth, generational wealth transfer, robust crypto positioning, and international expansion.
BofA Securities echoed the positive sentiment, reiterating a Buy rating on Robinhood and increasing its price target from $28 to $32. The upgrade follows the company’s strong second-quarter results, which saw revenue surpass analyst expectations. Robinhood reported $682 million in revenue, exceeding estimates of $643.34 million. Adjusted earnings per share also beat estimates, coming in at 21 cents compared to the anticipated 15 cents. The company’s revenue grew by 40% year-over-year, driven by a 69% increase in transaction-based revenues and a 22% rise in net interest revenues. The number of funded customers climbed by 1 million, reaching a total of 24.2 million.
BofA analysts are confident that Robinhood will continue to attract customers despite lacking certain features available with competitors. They attribute this to the platform’s competitive pricing, favorable market conditions, a strong investor community, and its highly rated user experience. BofA’s price target of $32 reflects a 16-times multiple of Robinhood’s estimated 2026 adjusted EBITDA.
Robinhood shares surged 3.8% to $18.60 at the time of publication. The positive analyst sentiment and strong Q2 results signal a potential upward trend for the stock.
