HOOD Stock On Track For Worst Month Since February: Why Is Retail Still Bullish?

Robinhood’s Q2 revenue climbed 32% year-over-year to a record $1.31 billion, and earnings per share of $0.62 beat consensus estimates.

• HOOD stock is down nearly 14% so far in July. 
• Retail investors on Stocktwits actively discussed the earnings results, expressing confidence that the stock still has room to run after a strong quarter. 
• As per Koyfin data, 28 analysts have a 12-month average price target of $121.86, which implies an upside of nearly 41% from last close. 

Shares of Robinhood Markets Inc. (HOOD) are headed for their worst monthly decline in about five months, down nearly 14%, amid a series of Wall Street price target cuts after its second-quarter results. 

Although the brokerage firm’s revenue climbed 32% year-over-year to a record $1.31 billion, and earnings per share of $0.62 beat consensus estimates, the stock declined as the beat was heavily influenced by a one-time accounting benefit from the deconsolidation of Robinhood Ventures Fund I.

Despite these catalysts, retail investors stay firmly ‘bullish’ on the stock, with message volumes trending in the ‘high’ levels at the time of writing. 

Why Is Retail Bullish On HOOD?

Retail investors on Stocktwits actively discussed the earnings results, expressing confidence that the stock still has room to run after a strong quarter. They believe that the selloff reflects profit taking rather than weakening fundamentals. 

One bullish user said, “$HOOD a billion in revenue in each quarter it’s gonna move relax.”

Another bullish user explained, “$HOOD fantastic quarter. Only selling off due to valuation at 40pe, but hood is incredible. As a day trader I use nothing think or swim as well as hood. Hood has the best user friendly interface, think or swim is for technicals fantastic for charting. But I know hood will continue to grow rapidly they are doing all the right things. Any Generation Z and millenials go to Hood when they start. I’ll be adding long soon and possibly doing a scalp trade.”

A third user said, “$HOOD Nasdaq up over 600 points and this is down after it crushed earnings.  Deeply oversold.”

Wall Street Stance On Hood

Needham lowered the price target on Robinhood to $120 from $123 and maintained a ‘Buy’ rating on the shares. Despite the cut, the new target implies an upside of 38% from its last close. 

The analyst noted that Q2 trading activity reached all-time highs for Equities, Options and Event Contracts, while July volumes across equities and options is in the same range as Q2, though crypto remains muted. Prediction markets continue to stand out with Q2 seeing a record 13.6B contracts traded, the firm added.

Deutsche Bank slashed the price target on Robinhood to $114 from $120 and kept a ‘Buy’ rating on the shares. Goldman Sachs and Barclays also cut back on their targets on HOOD. 

As per Koyfin data, 28 analysts have a 12-month average price target of $121.86, which implies an upside of nearly 41% from last close. 

HOOD stock is down nearly 25% this year. 

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