Robinhood (HOOD) shares were lower today despite being described as the “Amazon Prime” (AMZN) of e-brokers.
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Going for Gold
Four-star TipRanks-rated Dan Dolev, analyst at Mizuho, said that after a recent meeting with Robinhood management he noted that they were particularly excited about the potential of its Robinhood Gold service. This is a membership offering investors and traders better fees, expertly managed portfolios and AI tools to help understand markets.
Dolev said the Gold service had taken its inspiration from Amazon Prime in terms of ‘disruptive pricing’. This is a pricing tactic where new players in a market tempt customers away from rivals by offering lower prices.
Gold is available for users at $5 a month and has grown from 1 million subscribers in the middle of 2023 to 3.3 million today. Annual subscription revenue is around $200 million.
Gold customers typically have larger accounts with $40,000 assets under management and grow faster than non-Gold customers. There is also healthy demand for products with its Gold credit card offering boasting a waiting list of around 3 million users.
Crypto Potential
Dolev said Robinhood management was also excited about using crypto-tiered pricing to attract high-volume traders from other platforms and growing its prediction markets. He said more would be revealed at HOOD’s crypto event coming up next month.
Dolev, who has an outperform rating on the stock and a $65 price target, added that Hood was focused on three key strategic initiatives.
These were winning the $20 billion active trader revenue opportunity by expanding into desktop and web capabilities, remaining the number one app for millennials and Generation Z and continuing its global expansion in the UK and EU, Singapore and Canada.
Is HOOD a Good Stock to Buy Now?
On TipRanks, HOOD has a Moderate Buy consensus based on 14 Buy and 5 Hold ratings. Its highest price target is $105. HOOD stock’s consensus price target is $63.33 implying an 2.43% downside.
