HOOD - Robinhood: Cyclical Platform Upside (Rating Upgrade)

2024-06-30 11:39:21 ET

Summary

• Robinhood Markets has seen significant growth due to improved investor sentiment towards equity and crypto assets.
• The platform's revenues have surged, driven by strong capital markets and increased monetization.
• Robinhood's growth is cyclical, attracting new customers and deposits during periods of positive market performance.
• While a rising market currently improves Robinhood's financial condition, shares are overvalued, in my opinion.

Shares of Robinhood Markets ( HOOD ) have been on a tear in 2024 due to investor sentiment towards equity and crypto asset classes improving considerably. With Bitcoin ( BTC-USD ) and the S&P 500 making new all-time highs this year, trading activity on retail-focused investment platforms like Robinhood Markets has significantly increased, resulting in an upsurge in net deposits, customers' investment assets and earnings. The profit picture has also improved as well on the back of improving customer monetization. Shares are not cheap, however, with a P/E ratio in excess of 40X, but Robinhood is worthy of a rating upgrade nonetheless!...

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