Wolfe Research upgrades Robinhood to Outperform

Wolfe Research has upgraded Robinhood (HOOD) to Outperform from Peer Perform, citing the company's strong fundamentals.

Yahoo Finance's Seana Smith and Madison Mills report more on the call and how the company has benefitted from the meme stock rally.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl

Video transcript

Robin Hood could rally another 31%.

That's according to Wolf research analyst, Steven, she upgraded the company to outperform from pure perform the analyst noting that Robin Hood has strong fundamentals and will be able to build on what has already been a strong year for Robin Hood.

And also we should mention that the stock is already up in the trade this morning as well in this, those still would have.

I'm so sorry, imply a 31% upside for the stock moving forward and interesting that he's pointing out the fundamentals underpinning the stock uh as opposed to something that is a little bit less clear given that Robin Hood has seen a, a positive catalyst from the less clear trades, the mean stocks, the roaring kitty of it all that has been a benefit.

Robin Hood has been a beneficiary of that, but this analyst notes that the fundamentals here are part of what's going to drive the stock you.

He went on to note that some of the recent price swings, especially the spikes that we have seen in Robin Hood related to the meme stock rally.

A lot of that he characterized as just noise and really having no bearing on the company's positive view here of a Robin Hood.

So a couple of reasons as to why they are bullish on this name.

A lot of it coming after a recent meeting or conversation the analysts had here with Robin with Robin Hood's Chief Financial Officer saying that that conversation left him with more conviction and the durability here of Robin Hood's earnings growth algorithm.

He goes on to say that he expects Robin Hood could double gap eps over the next two years.

The strongest growth algorithm in our rate sensitive coverage.

He also went on to say that he continued to compound at a 30% annual rate beyond 2026.

So again, setting a price target of 29 bucks a share about seven bucks higher from where we are trading today.

And again, very positive of some of the underlying fundamentals, the momentum that we've seen in the name and very much uh independent of some of that excitement that we've seen that has been driven by that meme stock rally here uh over the last several weeks.