August saw a volatile start for stock markets as recession fears spooked investors. Interestingly, despite the market’s ups and downs, Robinhood investors opted to buy instead of sell. Robinhood (HOOD) CEO Vlad Tenev told Yahoo Finance that there has been more buying than selling this month as many users saw this volatility as a chance to boost their portfolios.
Tenev highlighted that market drops bring out different types of investors on Robinhood’s platform, which had 24.2 million funded customers and 11.8 million monthly active users during the second quarter. Experienced traders see volatility as an opportunity and use advanced strategies during downturns, while long-term investors focus on goals like retirement.
This highlights how retail investors have become more sophisticated with their investing compared to the past. Historically, retail traders were known to panic during times of financial crises, which caused them to sell their stocks at a loss out of fear of losing everything. However, that pattern appears to be broken, or at the very least reduced, based on Robinhood’s findings.
Is HOOD a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate consensus rating on HOOD stock based on six Buys, seven Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 74% rally in its share price over the past year, the average HOOD price target of $23 per share implies 24.32% upside potential.
