Robinhoood share price remained in a consolidation phase, even as the company published strong financial results. HOOD stock was trading at $103 on Thursday, down by nearly 10% from its highest point this year. This article highlights some of the top takeaways of its report and what to expect as it forms a bullish pattern.
Robinhood Earnings Review
Robinhood, a company that disrupted the brokerage industry by removing commissions, is firing on all cylinders. Its results showed that its revenue jumped by 45% in the second quarter to $989 million.
The revenue growth was driven by its options trading revenue, which grew by 46% to $265 million. Most importantly, its crypto business generated $160 million, surpassing the $66 million from equities.
Robinhood also benefited from the elevated interest rates, with its deposits making $357 million in net interest income. Consequently, its profit jumped by 105% to $386 million.
READ MORE: XLM and XRP Price Prediction: Will Ripple, Stellar Rally in August?
The company has become highly successful in the past few years. The number of funded clients jumped to 26.5 million, while gold subscribers jumped to 3.48 million, up by 13% from a year earlier.
It’s a gold platform that charges $5 a month, allowing users to earn a higher return on their uninvested cash, lower margin rate, and a 3% IRA contribution match.
Additionally, the company’s assets jumped by 99% to $279 billion as customers continued to deposit. The recent crypto market rally contributed to this surge as Bitcoin hit a record high.
Robinhood has continued to innovate. It has launched tokenized assets in Europe, is growing its Robinhood Strategies that now has over 100k customers and $0.5 billion in assets, and is working on its layer-2 network.
Still, some concerns are likely dragging the stock. For example, it expects to have higher costs because of its recent acquisition of Bitstamp and WonderFi. As a result, total expenses will be $2.25 billion, up from $2.15 billion in the previous estimate.
Additionally, the company is not cheap, as its forward PE ratio of 56 is higher than the financials sector median of 10 and the technology median of 24.
However, the stock may continue doing well as long as its revenue growth continues. In fact, the current stock price of $103 is cheaper than the median analyst’s estimate of $109.40.
HOOD Stock Price Analysis
The daily timeframe shows that the HOOD share price has remained in a tight range in the past few days. This consolidation happened after it more than doubled from its lowest point in April.
The stock remains above the 50-day and 100-day Exponential Moving Averages (EMA). As such, the ongoing wavering could be part of the mean reversion process. It could be because of the formation of the bullish pennant pattern, which comprises a vertical line and a symmetrical triangle.
Therefore, the most likely Robinhood stock price forecast is bullish, with the initial target being the year-to-date high of $113.38. A move above that level will point to more gains, potentially to $120.
READ MORE: Treehouse Crypto Price Has Crashed: Will TREE Rebound?
