Robinhood Stock Forecast Ahead of Earnings: Buy or Sell?

Robinhood stock price has rebounded in the past few days. Broader performance of the equities and crypto markets helped this. HOOD jumped to $90, up sharply from the year-to-date low of $63. This rally may continue as the company releases its next financial results.

Robinhood Stock in Focus Ahead of Earnings Report

HOOD stock will be in the spotlight in the coming week as it publishes its financial results. This will provide more color on its growth trajectory.

Wall Street analysts expect these results to show that its business did well in the first quarter. This happened as the volatility in the stock market rose. Indeed, Wall Street banks like Goldman Sachs, Morgan Stanley, and Citigroup reported strong trading revenues last week.

Soaring volume in the stock and options market is important for the company. It leads to higher fees from its market makers, including companies like Citadel and Virtu Finance. This volume will likely soar after the SEC ended pattern day trading.

The only blemish in its report will come from its crypto trading business. It likely experienced another quarter of sluggish growth because of the crypto winter. Bitcoin and most altcoins tumbled by double digits in the first quarter. This led to weak volume in centralized and decentralized exchanges.

Robinhood has become a major player in the crypto market, handling transactions on its platform and on Bitpanda. That’s a company it acquired last year in a $200 million deal.

Analysts expect Robinhood’s revenue to rise by 22.50% to $1.14 billion in the first quarter. Yahoo Finance data confirms these upcoming results reflect steady growth for the company.

Robinhood’s earnings per share (EPS) are also expected to do well, rising from 37 cents to 40 cents in the same period.

Robinhood Has Some Major Tailwinds

These results come at a time when the company is facing some major tailwinds. For example, the company recently announced a huge $1.5 billion share buyback plan. This will reduce the outstanding shares substantially and boost its EPS.

This launch is a sign that the management believes that the stock has become undervalued. Additionally, the crypto market is showing a lease of life. With this, Bitcoin and other top altcoins are in a bull market after rising by over 20% from the lowest level this year.

Soaring crypto prices are bullish because it leads to more activity among investors. As a result, its cryptocurrency revenue likely dropped in the first quarter. However, chances are that it will start recovering in the current one.

The company has also launched some new products that will start generating returns soon. Its most significant launch was the prediction market, which is starting to see higher volume.

Robinhood also launched its wealth management solution a few months ago. In an update that happened three months after launch, the company said that the business had attained $1 billion in deposits.

Most recently, Robinhood was tapped by the Trump administration to run the Trump Accounts. They are expected to have billions of dollars in assets in the coming years.

Robinhood Stock Price Technical Analysis

The daily timeframe chart shows that the Robinhood stock price has pulled back sharply in the past few months. It has moved from a high of $153 in October last year to $88 today. Recently, however, it has rebounded from a low of $63 as investors waited for the upcoming earnings.

Robinhood Stock has now moved above the 50% Fibonacci retracement level and the 50-day and 100-day Exponential Moving Averages (EMA).

At the same time, the stock has jumped above the upper side of the falling wedge pattern. That’s a common bullish reversal sign in technical analysis.

The Relative Strength Index (RSI) and the MACD indicators have pointed upwards. This indicated that it is gaining momentum.

Therefore, the most likely HOOD stock forecast is bullish, with the next key target being the psychological level at $100. This target is slightly above the 38.2% Fibonacci retracement level.