Key Insights
- Robinhood stock price has crashed into a bear market.
- Cathie Wood has continued to accumulate the stock.
- Technical analysis suggests that it has more upside.
Robinhood stock price has crashed into a bear market in the past few weeks, dropping from the year-to-date high of $153.60 to the current $122. This article examines whether it is safe to invest in HOOD stock as Cathie Wood continues to buy the dip.
Cathie Wood Bought the Robinhood Stock Dip
Cathie Wood, the founder of the $17 billion Ark Invest, has continued to accumulate the falling Robinhood stock, a sign that she expects it to rebound in the coming months.
Filings show that she bought HOOD stock worth over $30 million last week. The Ark Innovation ETF (ARKK) holds shares worth over $247 million, while the Ark Next Generation Internet ETF (ARKW) holds shares worth $109 million.
The ARK Blockchain & Fintech Innovation ETF (ARKF) holds HOOD stock worth over $60 million. This is a sign that Wood strongly believes that the company has more upside despite soaring by over 200% in the last 12 months, a move that has made it one of the best-performing companies in the S&P 500 Index.
Her views align with those of most Wall Street analysts. Data compiled by MarketBeat shows that the consensus target among top Wall Street analysts is that the stock will rise to $137, which is ~12% above the current level.
Barclays’ Benjamin Budish is the most optimistic analyst, with a price target of $171, up by 43% from the current level. Loop Capital expects the stock to rise to $152, while Morgan Stanley forecasts it to reach $147.
Robinhood is Growing, But Valuation Risks Remain
The main bullish catalyst for the Robinhood stock price is that its business continues to perform well and gain market share despite rising competition from companies like SoFi and WeBull.
The most recent results showed that its business continued growing across all its segments. Its funded customers grew to 26.8 million in the third quarter from 24 million in the same period last year.
Robinhood’s platform assets jumped to $333 billion from $15 billion in Q3’24. This growth translated to a revenue growth of over 100% to $1.27 billion. Most importantly, the company’s crypto revenue surged by 300% in this period.
Wall Street analysts are highly optimistic that the company has more room to grow in the coming months. The average estimate is that its revenue will come in at $1.33 billion, up by 31% from the same period last year. Its annual revenue is expected to be $4.52 billion, up by 53% YoY.
The company is hoping to continue growing, both in its core market of the United States and in other countries. It recently acquired two companies in Indonesia, a country with millions of traders.
It has also launched more services, including tokenized assets and a prediction market.
However, a major risk is that the company is highly overvalued. It has a forward price-to-earnings (P/E) ratio of 60, higher than the sector median of 12.60. Its forward multiple is much higher than the five-year average of 36.
More data reveals that the forward PEG ratio is 2.45, which is also bigger than the industry average of 1.08.
HOOD Stock Price Technical Analysis
The daily timeframe chart shows that the HOOD share price has rebounded from a low of $29.85 in April to the current $120. It has surpassed the 100-day and 200-day Exponential Moving Averages (EMAs).
The stock has formed an inverse head-and-shoulders chart pattern, one of the most common bullish reversal signs. Its head is at $100, while the left shoulder is at $120. It is now hovering at the right shoulder.
Therefore, the most likely HOOD stock price forecast is bullish, with the initial target to watch being at $153, the highest point this year. This target is about 25% above the current level. However, a drop below the right shoulder at $114 will cancel the bullish outlook.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
