Robinhood Stock Upgraded: What’s Next for HOOD?

Robinhood Stock Sees Surge in Institutional Investment

Robinhood Stock– Robinhood Markets, Inc. (NASDAQ:HOOD) has experienced notable institutional investor activity recently, with hedge funds and large investors significantly increasing their positions. Quest Partners LLC, for example, boosted its stake in Robinhood by an impressive 1,008.4% in Q3, according to the firm’s latest Form 13F filing with the Securities and Exchange Commission. After acquiring an additional 13,725 shares during the quarter, Quest Partners now holds 15,086 shares, valued at $353,000 as of the most recent reporting period. Along with Quest Partners, other institutional investors have also been active, reflecting growing confidence in Robinhood’s market prospects.

Hedge Funds and Institutional Investors Make Big Moves

Several institutional investors have recently made moves to increase their stakes in Robinhood. HM Payson & Co. raised its position by 53.5% in the third quarter, bringing its total to 1,176 shares, worth $28,000. Signaturefd LLC also increased its position by 16.5%, now owning 3,437 shares valued at $80,000, while Castleview Partners LLC raised its stake by 18.2%, now holding 3,788 shares worth $89,000. Additionally, Axxcess Wealth Management LLC grew its position by 3.1%, owning 19,773 shares valued at $463,000 after purchasing more during the quarter.

Interestingly, institutional investors and hedge funds together own 93.27% of Robinhood’s outstanding shares. This indicates strong institutional confidence in Robinhood’s future, which could have a significant impact on the stock’s performance in the coming months.

Robinhood’s Quarterly Earnings and Insider Activity

Despite the surge in institutional interest, Robinhood’s Q3 earnings report showed mixed results. The company reported $0.17 earnings per share (EPS), missing analysts’ consensus estimate of $0.18 by just $0.01. However, Robinhood posted a 21.80% net margin and a 7.52% return on equity, showing that the company remains profitable and financially sound. Revenue for the quarter came in at $637 million, up 36.4% year-over-year, although it fell short of the consensus estimate of $660.53 million. These results demonstrate Robinhood’s continued growth despite missing some analyst expectations.

Meanwhile, insider activity has also been significant. On October 8th, Robinhood director Meyer Malka sold 3.23 million shares at an average price of $25.07, totaling $80.87 million. This sale marked a 9.90% decrease in Malka’s holdings. On September 3rd, insider Daniel Martin Gallagher, Jr. sold 12,500 shares at an average price of $19.33, worth approximately $241,625. Overall, over the past 90 days, insiders have sold a combined 4.68 million shares, valued at around $115 million.

Despite this insider selling activity, 19.95% of Robinhood’s shares remain in the hands of corporate insiders, which is not uncommon for a company of this size and stature. These transactions may suggest that insiders are capitalizing on the stock’s current value, but they do not necessarily reflect a lack of confidence in the company’s long-term outlook.

Analyst Opinions and Future Growth Potential

The sentiment surrounding Robinhood is not entirely negative, however. Several Wall Street analysts have recently issued upgraded reports for Robinhood, forecasting growth ahead. Needham & Company LLC upgraded Robinhood’s stock from a “hold” rating to a “buy” rating, setting a price target of $40.00 in a report released on November 18th. Meanwhile, Barclays raised its target price from $23.00 to $26.00, maintaining an “equal weight” rating in its October 31st research note.

One of the most significant upgrades came from Sanford C. Bernstein, which raised its price target for Robinhood from $30.00 to $51.00 and rated the stock “outperform” in a November 20th report. According to Bank of America, Robinhood’s stock price target was raised from $28.00 to $32.00, and the firm maintained a “buy” rating in an August research report. Morgan Stanley also increased its price target from $22.00 to $24.00, assigning a “neutral” or “equal weight” rating in November.

Overall, analysts’ consensus has remained “Moderate Buy”, with an average target price of $28.66. While one analysthas rated the stock as a “sell”, six analysts have assigned a “hold” rating, and nine analysts have given the stock a “buy” rating. This balanced outlook suggests that Robinhood’s stock has strong upside potential, but it also carries risks that investors need to consider.