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Why Robinhood Stock Was Moving Higher Today
Shares of Robinhood Markets (NASDAQ: HOOD) were gaining today after the company agreed to pay $45 million to settle claims with the Securities and Exchange Commission (SEC), and it received two high-profile endorsements from Wall Street analysts.
As a result, the stock was up 9.3% as of 2:21 p.m. ET.
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Robinhood is getting stronger
2024 was a breakout year for Robinhood as it rode the recovery in crypto along with internal cost-cutting and improvement to nearly triple last year, and the company is now getting recognition from Wall Street.
This morning, Bernstein named Robinhood as its best idea in Global Digital Assets. The research firm said Robinhood was likely to benefit from relaxing cryptocurrency regulations under President-elect Donald Trump. It also expected Robinhood's strong revenue growth to continue into 2025, and it saw profit margins ramping up. It reiterated an outperform rating with a price target of $51.
Similarly, Morgan Stanley added Robinhood to its "Financials Finest," calling out a sustainable business model that's evolved from its days as a meme stock. Robinhood has a number of expanding business lines that should drive profits higher this year and beyond. Morgan Stanley has an overweight rating on the stock with a $55 price target.
Finally, the SEC said that Robinhood agreed to settle $45 million over issues like record-keeping, trade reporting, and other violations. However, investors seemed to shrug off that news as $45 million is manageable for a company the size of Robinhood.
What's next for Robinhood
Robinhood's fortunes tend to rise and fall with the stock market, crypto, and broader investor sentiment, and its launches of businesses like retirement are going well.
Revenue rose 36% in the third quarter to $637 million, and it reported a generally accepted accounting principles (GAAP) net income of $150 million, up from a loss a year ago. With markets near all-time highs and looser crypto regulations expected under Trump, Robinhood looks poised for another strong year.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
