Top Analyst Explains Why Robinhood Stock is Ripe for a Comeback

Key Insights

• Robinhood stock price has dropped by over 55% from its all-time high.
• A top analyst believes that the stock will ultimately rebound this year.
• The company has become highly innovative, which will support its rebound.

Robinhood stock price has plunged sharply from its peak in October last year, when it reached its record high of $154. It has dropped to $68.9, down by over 55% from that all-time high. Still, one popular analyst believes that the stock is due for a rebound in the coming weeks.

Top Analyst Explains Why HOOD Stock Price Will Rebound

Robinhood stock has dropped sharply in the past few months for three main reasons. First, the drop happened as investors booked profits after it surged to a record high. At its peak, it was up 2,128% from its 2023 low. It is common for financial assets to drop sharply after such a strong rally.

Second, the stock dropped as investors sold the news, especially the S&P 500 Index inclusion, which pushed more people to buy the shares.

Third, and most importantly, the stock drop coincided with Bitcoin’s peak, which helped to reduce its crypto revenue. The most recent results showed that its crypto revenue rose by just 16% in the fourth quarter.

Still, a top analyst believes that the company has more room to grow, which will ultimately boost the stock market. He noted that the company had become the go-to brand among young people.

As such, while older people consider traditional brands like Schwab and TD Ameritrade, many young people prefer Robinhood. He expects that most of their money will end up to the company.

At the same time, he pointed to its growing innovation, including embracing the subscription model, with its Gold product having over 4.2 million users, up by 6.2% YoY.

Robinhood Has Become One of the Most Innovative Companies in Finance

Recent announcements show that Robinhood has become one of the most innovative companies in the financial services industry. For example, the company recently unveiled its platinum card that costs about $650 a year. This card will compete with companies like American Express and JP Morgan.

Robinhood is also quietly disrupting the banking industry through its Robinhood Banking business, which aims to offer private banking to the masses. It is doing that in partnership with Coastal Community Bank and has already accumulated over $1 billion in deposits.

Robinhood has also become a major player in the tokenization industry, where it is offering hundreds of stocks and Exchange Traded Funds (ETF) to European customers. It will launch its layer-2 blockchain network this year.

Additionally, the company has moved into the booming prediction markets, where it is handling transactions worth millions of dollars a month.

The company has also launched a new fund, allowing private investors to invest in private companies like Revolut, Stripe, Ramp, Databricks, and ElevenLabs. The fund recently went public and is valued at over $378 million.

Therefore, all these factors will sustain Robinhood’s revenue growth. Analysts believe that the company will make $5.4 billion this year, up by 20% from a year earlier. It will then make $6.2 billion in the following year, and possibly boost its share buyback.

Robinhood Stock Price Technical Analysis

The weekly timeframe chart shows that HOOD stock has crashed over the past few months, falling from a high of $153 in October to the current $68.90. It is now hovering at its lowest level since June last year.

On the positive side, the stock is nearing the 61.8% Fibonacci Retracement level, where most rebounds normally happens. Also, the Average Directional Index (ADX) has moved to 27, while the Relative Strength Index (RSI) is nearing the oversold level.

Therefore, the most likely HOOD stock price forecast is bullish, with the initial target to watch being at $80, which is the 50% Fibonacci Retracement level.

A move above that level will point to more gains, potentially to the psychological level at $100. A drop below the 61.8% retracement level will invalidate the bullish outlook.

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