HOOD Should I Buy
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Robinhood Markets Inc (HOOD) is not a strong buy at the moment for a beginner investor with a long-term strategy. While there are some positive catalysts, the technical indicators, financial performance, and mixed analyst sentiment suggest that the stock may face short-term volatility. It is better to hold off on making an investment until clearer positive momentum is observed.
The technical indicators are bearish. The MACD is negative and expanding downward (-1.633), the RSI is at 23.388 (neutral zone but leaning towards oversold), and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels (S1: 73.099, S2: 65.106), and the pre-market price is down 0.38%.
Cathie Wood's ARK Investment Management recently acquired significant shares of Robinhood, indicating long-term confidence. The company's gross margin increased to 95.56% YoY, and its prediction markets have shown strong performance with record-high January volumes.
Analysts have lowered price targets across the board, citing crypto weakness, softer revenue, and missed transaction income. The stock has been in a downtrend, with an 8.91% drop following Q4 earnings. Technical indicators suggest further downside risk.
In Q4 2025, Robinhood reported a 26.53% YoY revenue increase to $1.283 billion. However, net income dropped 33.95% YoY to $605 million, and EPS fell 34% YoY to $0.66. While gross margin improved slightly to 95.56%, the decline in profitability metrics raises concerns.
Analysts have mixed views. Truist, Goldman Sachs, and Needham maintain Buy ratings but have lowered price targets, citing short-term volatility and crypto weakness. JPMorgan and Barclays have Neutral or Overweight ratings but highlight challenges in revenue and net deposits growth. Wolfe Research upgraded the stock to Outperform, citing attractive risk/reward after the recent pullback.
