Robinhood Stock Climbs Pre-Market On Goldman Sachs Upgrade And Price-Target Hike, But Retail Views Are Mixed

Shares of fintech firm Robinhood Markets Inc (HOOD) were trading over 2% higher in Friday’s pre-market session after Goldman Sachs reportedly upgraded the stock to ‘Buy’ from ‘Neutral’ and raised its price target to $46 from $40.

This implies a 15% upside potential for the stock from its current levels of about $40.

Analysts have expressed optimism after Robinhood’s first investor day conference. The firm presented a 10-year outlook, including initiatives like growing its crypto exchange business and plans to become the top active trading platform within the next two years, according to a CNBC report.

“HOOD has successfully migrated from a fast-growing, periodically profitable online broker servicing mostly younger investors, to a best-in-class top and bottom-line asset under custody compounder with a growing total addressable market (TAM),” Goldman Sachs analyst James Yaro said, according to the report.

Some of the initiatives announced by the firm include plans to launch Futures in early 2025, which offers a nine-figure revenue opportunity, possibility of expanding into sports betting, plans to launch a brokerage in Asia next year, and leverage its AI capabilities to provide advisory services.

The Goldman Sachs analyst believes the company can benefit in the short term from increasing its market share of active traders using its platform. Over the long term, the analyst sees an opportunity to bring to fruition its ambitions of growing internationally and entering the wealth management sector.

“HOOD offers best-in-class, sustainable asset growth and revenue growth, and robust operating leverage, driving sustained GAAP profitability potential, with potential near-term earnings upgrades from continued improvements in the retail trading backdrop,” Yaro said.

Following its investor day conference, retail sentiment remains positive but has inched lower into the ‘bullish territory’ (57/100) from ‘extremely bullish’ a day ago.

HOOD’s Sentiment Meter and Message Volume as of 8:59 a.m. ET on Dec. 6, 2024 | Source: Stocktwits

Meanwhile, other brokerages have raised their price targets on the stock. Piper Sandler raised its price target to $54 from $42, while keeping an ‘Overweight’ rating on the shares. Deutsche Bank, too, raised the firm's price target to $42 from $36, while keeping a ‘Buy’ rating.

Retail chatter, however, indicated mixed opinions on the stock.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<