Robinhood Stock Soars 200% in Nine Weeks Driven by Crypto Expansion and Market Gains

Robinhood’s stock price has surged for nine consecutive weeks, reaching a new peak of nearly $92. This marks a 200% increase from its April lows and a 1,042% rise from its lowest point in 2023. The company's market capitalization has jumped to over $77 billion, reflecting robust investor enthusiasm and confidence in its future prospects.

The recent surge in Robinhood's stock price can be attributed to several factors. One key driver is the company's expansion into the crypto market, where it has become a major player. Robinhood recently acquired Bitstamp, whose 24-hour volume jumped to nearly $200 million. Additionally, the company's growing exposure to the crypto market has contributed to its stock price surge.

Another factor contributing to the surge is the recent performance of the U.S. equities market. The Nasdaq 100 and S&P 500 have reached all-time highs, leading to increased trading volume for brokerage companies like Robinhood. Higher stock prices have also benefited Robinhood, as it has seen a significant increase in its funded customer accounts, which rose to 25.8 million, up from 23.9 million during the same period last year. Gold subscribers increased to 3.19 million from 1.68 million in 2024.

The most recent earnings results showed that total platform assets increased to $221 billion, while net deposits rose by $18 billion. This growth translated into quarterly revenue of $918 million, up from $618 million in Q1 2024. Analysts anticipate that the company’s growth will continue, with the average revenue estimate for the current quarter standing at $891 million, a 30% year-over-year increase. Annual revenue is expected to grow by 23% to $3.6 billion, followed by $4.24 billion next year.

Management hopes to accelerate this growth by rolling out its banking solutions, expanding internationally, and innovating through the launch of tokenized products. However, the risk is that the company appears significantly overvalued, with a price-to-earnings ratio of 56, well above the sector median of 10. The stock is also trading above the average analyst price estimate of $70.38.

The daily chart shows that HOOD stock has been in a strong bull run and is now hovering near its all-time high. It has jumped above a key resistance level at $67, the highest swing from February. The Relative Strength Index has climbed above the overbought threshold, while the Average Directional Index has reached 40, an indication that the bullish trend is strengthening. The stock has remained above its 50-day and 100-day Exponential Moving Averages. Currently, it is trading approximately 32% above the 50-day EMA. HOOD may undergo a mean reversion and potentially retest support at $67, which aligns with both the 50-day EMA and the previous February high.

Despite the recent surge in Robinhood's stock price, some analysts have expressed caution. They have noted that the company's stock price is highly volatile and that investors should be prepared for potential fluctuations in the future. They have also highlighted the importance of conducting thorough research and analysis before making any investment decisions.