Robinhood Stock Forecast Ahead of Earnings: Is it a Buy or Sell?

Robinhood stock recovered on October 21, closing 3.79% higher at $101.93. The rebound followed four completed weeks of losses as investors prepared for third-quarter earnings.

HOOD touched $94.77 on October 20, near another October low of $94.52. That placed the $94.50–$95 region in focus before Robinhood’s October 27 report.

The company faces competing trends in cryptocurrency trading, prediction markets, and blockchain activity. Its next results could clarify which businesses contribute to revenue growth.

Robinhood Markets to Publish its Earnings Report

The ongoing HOOD stock retreat has coincided with the crypto market sell-off, affecting Bitcoin and most altcoins. Bitcoin has dropped to $82,000 from the year-to-date high of $126,3000, while the market capitalization of all coins has slumped to $2.7 trillion.

Robinhood’s business is affected by the performance of crypto prices because of its role in the industry. It provides a platform for people to trade Bitcoin and other altcoins. It also acquired Bitstamp, a mid-size crypto exchange.

The next important catalyst for the stock will be its earnings report, which will come out on October 27. These results will provide further insights into its business trajectory, especially regarding its predictions and blockchain businesses.

Wall Street analysts predict that the upcoming results to show that its revenue rose by 12% in the third quarter to $1.43 billion. Its earnings per share are expected to come in at 55 cents, a slight decline from last year’s 61 cents.

In addition to these results, the stock will react to the company’s forward guidance. The average estimate is that its earnings per share for the fourth quarter will be 62 cents, down from 66 cents previously.

Earnings to Provide Insights Into Key Businesses

The upcoming results will also provide insights into the company’s newer businesses. One of them is Robinhood Chain, its layer-2 network that has continued to grow this month.

DeFi Llama data shows that the total value locked (TVL) has jumped to a record high of $1.14 billion. Most of the TVL is in several protocols like Morpho Blue, Steakhouse Financial, Uniswap, and Lighter.

The same growth is happening in its stablecoin ecosystem, where its total tokens have achieved a market capitalization of over $1.02 billion. Robinhood Chain’s DEX volume has jumped to over $107 billion, higher than other chains like Cardano and Algorand. It has made over $47 million in chain fees since its inception.

The results will also provide hints about its prediction platform, which has led to a surge in volume this year. The company is now slowly routing some of the orders through Rothera, its joint venture with Susquehanna. It is also betting big on stock tokenization.

These results come at a time when most analysts are bullish on the company, citing the diversity of its business. The average estimate among analysts is $130, up by about 32% from the current level. JPMorgan recently boosted the target from $103 to $115, while Wells Fargo moved its target to $120. Morgan Stanley sees the stock hitting $160 over time.

Robinhood Stock Price Technical Analysis

The weekly chart shows that HOOD stock has formed an ascending channel in the past few months. This channel is characterized by a series of lower lows and lower highs. It has now slipped to the lower side of this channel, which has also coincided with the 50-week moving average.

Therefore, there is a likelihood that the stock will bounce back, potentially reaching $126, its September high. The bullish outlook will become invalid if it drops below the lower channel boundary. If this happens, it may drop to $85.

This article is for informational purposes only and does not constitute financial advice. Stocks carry price volatility and potential losses; readers should conduct independent research before investing.