Robinhood Markets Inc. (HOOD) hit a new all-time high on Monday after news of its upcoming addition to the S&P 500 (SPY). However, the stock pulled back nearly 2% on Tuesday as of this writing. Even so, HOOD remains up more than 200% year-to-date. Following this massive rally, many investors are asking whether Robinhood is still a buy. According to Bernstein’s top-rated analyst Gautam Chhugani, the answer is yes.
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Notably, Robinhood’s inclusion in the S&P 500 will likely boost demand for HOOD shares, since index funds and ETFs that follow the benchmark are required to buy the stock.
Bernstein Sees More Upside for HOOD Stock
Following the recent news, Chhugani reiterated his Buy rating on HOOD stock. His price target of $160 predicts an upside of 38% from current levels. According to Chhugani, Robinhood is moving beyond its image as a platform for casual traders and is now positioning itself as a growing financial “super-app.” He believes that the company’s recent addition to the S&P 500 gives it more room to expand market share.
Additionally, Bernstein estimates that Robinhood now makes up about 12% of U.S. retail trading revenue across stocks and crypto, up from just 7% two years ago. Meanwhile, the company has also grown rapidly in crypto, capturing roughly 30% of the market after FTX’s collapse and Binance.US’s retreat from the U.S.
Chhugani also praised Robinhood’s strong pace of product innovation and ability to make money from it. On the other hand, he warned that regulatory risks tied to payment for order flow and crypto trading still hang over the company.
Is Robinhood Stock a Good Buy?
According to TipRanks’ consensus, HOOD stock has a Moderate Buy rating, based on 12 Buys and six Holds assigned in the last three months. The Robinhood Markets share price target of $117.81 implies a 2% upside over current trading levels.
