Top 4 Reasons Why Robinhood Stock is Set to Rebound

Robinhood stock remains well below its September peak despite recovering from this week’s sharp selloff.

HOOD fell from an intraday high of $125.25 on Sept. 8 to near $107 during Sept. 17 trading. The pullback has brought technical support back into focus while Robinhood Chain continues reporting higher decentralized-finance activity.

At the same time, Robinhood’s second-quarter results and recent analyst revisions show continued growth across brokerage, prediction markets and blockchain infrastructure.

Robinhood Stock Price Has Formed Strong Technicals

One of the top reasons why the HOOD stock has more room to recover is its strong technicals. A closer look shows that it has formed a rising and broadening wedge pattern, which is commonly known as a megaphone. This pattern often leads to more gains over time.

The stock has also remained above the 50-day and 200-day Exponential Moving Averages (EMA). In most cases, remaining above these averages is usually a sign that the upward trend is intact. A drop below these averages would be a sign that bears have prevailed and push it much lower.

HOOD stock also remains above the Supertrend indicator, which has remained in the green in the past few days. Therefore, the stock will likely bounce back, potentially to this month’s high of $125. A move above that level will point to more gains, potentially to the all-time high of $153, which is about 42% above the current level.

HOOD to Benefit as Robinhood Chain Growth Continues

Robinhood stock may also benefit from the ongoing Robinhood Chain growth. Data shows that all metrics have continued to improve. A key data is the ongoing growth of the total value locked (TVL) in its decentralized finance (DeFi) ecosystem. Its TVL jumped to over $948 million.

Most notably, its stablecoin supply has crossed the important $1 billion milestone. This supply has made it the 14th-biggest chain in this metric. It is bigger than other popular chains like Stellar, TON, Monad, and Mantle. Most of the top stablecoins in the network are Global Dollar (USDG), Ethena USDe (USDe), and United Stables (U).

More metrics show how the network is growing. For example, it has become the third-biggest chain in terms of decentralized exchange (DEX) volume. It handled over $39 billion in the last 30 days, slightly lower than Ethereum’s $42.5 billion.

Robinhood’s Business is Doing Well Despite Challenges

Meanwhile, the last financial results showed that the company’s business continued to grow in the second quarter despite challenges in the crypto industry. Its funded customers jumped by 1.9 million to 28.4 million, while the total amount of assets on its platform rose to $369 billion from $279 billion on the same quarter last year.

Robinhood Market’s revenue jumped to over $1.3 billion, up modestly from $989 million in the same period last year. Also, its adjusted EBITDA rose to $741 million from $549 million a year earlier.

The company’s revenue is expected to keep growing in the foreseeable future, helped by its top initiatives such as its prediction markets. The average estimate among analysts is that its annual revenue will jump by 16.3% to $5.2 billion, followed by $6.62 billion next year.

Analysts are Bullish on HOOD Stock

Most analysts are also bullish on the HOOD stock. Cantor Fitzgerald’s Ramsey El-Assal recently reiterated the overweight rating, while Deutsche Bank hiked from $136 to $138. Citizens’ Devin Ryan, hiked his target to market outperform, with its target rising from $155 to $165. Other analysts bullish on the shares include those from Mizuho, Benchmark, Bernstein, and Loop Capital.

Most of these analysts cite the ongoing growth, diversification of its business, and the fact that its stock and options volumes have continued to rise.

This article is for informational purposes only and does not constitute financial or investment advice. Technical indicators, analyst price targets and blockchain metrics do not guarantee future stock performance.