Robinhood (HOOD) shares are taking a breather this Thursday, trading slightly lower after a massive two-day rally. The stock surged on Wednesday following a landmark decision by the U.S. Securities and Exchange Commission (SEC) to scrap the 25-year-old “Pattern Day Trading” (PDT) rule. Previously, traders were required to keep at least $25,000 in their accounts. With this limit removed, investors can now trade more freely based on real-time risk.
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Following the move, several analysts turned positive on brokerage stocks.
Goldman Sachs Sees Robinhood as the Key Beneficiary
Goldman Sachs analyst James Yaro said this change is a major “tailwind” for the industry. He noted that Robinhood stands out as the “primary beneficiary,” mainly due to its large base of retail investors.
According to Yaro, removing these barriers could drive the following:
- Explosive Trading Volume: Small traders who were previously “locked out” can now contribute to higher daily active users.
- Revenue Growth: More trades mean more regulatory and transaction fees, which Goldman believes will drive a stellar Q2 and Q3 for the company.
- Fair Play for Everyone: Instead of checking how much money you have, the new rules focus on how safe your trades are. This is a huge win for regular people who want to invest like the pros.
Is HOOD a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HOOD stock based on 14 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average HOOD price target of $104.56 per share implies 19.74% upside potential.
