$HOOD On Track To Rebound
With the macroeconomic stability the US has been witnessing lately, more investors have been returning to the stock market and crypto trading. One of the companies benefitting from this return is leading trading platform Robinhood Markets, Inc. (NASDAQ: HOOD) which is up nearly 32% YTD. With this in mind, HOOD could have more room to grow this year as the company’s crypto trading platform might be gaining market share from crypto trading giant Coinbase Global, Inc. (NASDAQ: COIN) according to analysts. Given the company’s plans to close an acquisition this quarter and its impressive performance so far this year, the HOOD stock forecast appears to be brighter than ever.
HOOD Fundamentals
Gaining Market Share
With the Securities and Exchange Commission (SEC) suing Coinbase for trading unregistered securities, analysts believe that HOOD has been gaining share over Coinbase over the past few months. The reason analysts share that belief is that Coinbase should have realized $117 million in revenues in April according to the current fee Coinbase collects, but in reality, it only realized $110 million.
On that note, Coinbase increased its fee from 1.33% in Q3 2022 to 1.68% at the moment and this increase may be a pivotal reason for customers turning away from Coinbase to HOOD which offers commission-free crypto trading. In this way, HOOD has the potential to increase its crypto trading platform’s market share substantially.
New Acquisition & Cost Cuts
HOOD is also planning to increase the range of financial services it is offering to its customers and add it to its existing cash card product with the planned acquisition of X1 for $95 million in cash, with the transaction expected to close this quarter. X1 is a credit card company that offers instant reward points and does not rely on credit scores for approvals; instead, income is used to determine whether or not an application is approved and the credit limit for the cardholder.
The X1 acquisition is certainly on brand for HOOD since the X1 card has no annual fee, no foreign transaction fees, and no late fees, which is something ingrained in the core identity of HOOD. Furthermore, the acquisition will provide a new revenue stream for HOOD and will offer an opportunity to implement X1 in its brokerage platform especially since X1 was planning to give its cardholders the ability to buy stocks by using earned reward points.
Around the same time HOOD announced its plan to acquire X1, HOOD laid off 7% of its staff to lower its costs, since HOOD has trimmed its guidance for 2023 GAAP total operating expenses to 2.345B-2.485B from the previous guidance of 2.375B-2.515B. In this way, HOOD might return to profitability especially with the growing interest in stock and crypto trading due to the improving macroeconomic outlook.
Breaking Out Of A Pattern
On the daily chart, HOOD stock successfully broke out of a falling wedge pattern and confirmed the break with a retest of the wedge’s trendline. With the stock forming higher highs, HOOD could witness an upward trend from current levels which is supported by the platform’s successes this year. For this reason, the HOOD stock forecast could be extremely bullish this year.
HOOD Financials
n its Q1 2023 report, HOOD’s assets increased 20% QoQ from $23 billion to $27.7 billion, while its cash and cash equivalents decreased 14% QoQ from $6.3 billion to $5.4 billion. HOOD’s total liabilities increased by 27% QoQ from $16.3 billion to $20.7 billion.
Revenue also increased 47% YoY from $299 million to $441 million. Operating costs increased almost 37% from $690 million to $950 million, which contributed to the operating loss increase of 30% YoY from $391 million to $509 million. As a result, HOOD’s net loss increased 30% YoY to $511 million.
Technical Analysis
HOOD stock’s trend is neutral with the stock trading in a sideways channel between $8.33 and $10.15 which it has broken recently. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is overbought at 74 and the MACD is bullish.
As for the fundamentals, HOOD has an upcoming catalyst in the closing of the X1 acquisition this quarter. Moreover, HOOD is expected to post its Q2 earnings on August 23 which are critical to confirm whether HOOD has been gaining market share from Coinbase or not.
HOOD Forecast
HOOD is currently seeing a lot of interest, with speculations of it gaining market share over its competitor in the crypto trading space Coinbase. Given HOOD’s efforts to cut its expenses with the last round of layoffs, the platform is actively improving its long-term profitability prospects which would be a major achievement for the company. Meanwhile, HOOD is actively trying to broaden its product offering by venturing into the credit card space with the planned acquisition of X1 which is set to be closed this quarter. For these reasons, the HOOD stock forecast appears to be bright this year.
HOOD Fundamentals
Gaining Market Share
With the Securities and Exchange Commission (SEC) suing Coinbase for trading unregistered securities, analysts believe that HOOD has been gaining share over Coinbase over the past few months. The reason analysts share that belief is that Coinbase should have realized $117 million in revenues in April according to the current fee Coinbase collects, but in reality, it only realized $110 million.
On that note, Coinbase increased its fee from 1.33% in Q3 2022 to 1.68% at the moment and this increase may be a pivotal reason for customers turning away from Coinbase to HOOD which offers commission-free crypto trading. In this way, HOOD has the potential to increase its crypto trading platform’s market share substantially.
New Acquisition & Cost Cuts
HOOD is also planning to increase the range of financial services it is offering to its customers and add it to its existing cash card product with the planned acquisition of X1 for $95 million in cash, with the transaction expected to close this quarter. X1 is a credit card company that offers instant reward points and does not rely on credit scores for approvals; instead, income is used to determine whether or not an application is approved and the credit limit for the cardholder.
The X1 acquisition is certainly on brand for HOOD since the X1 card has no annual fee, no foreign transaction fees, and no late fees, which is something ingrained in the core identity of HOOD. Furthermore, the acquisition will provide a new revenue stream for HOOD and will offer an opportunity to implement X1 in its brokerage platform especially since X1 was planning to give its cardholders the ability to buy stocks by using earned reward points.
Around the same time HOOD announced its plan to acquire X1, HOOD laid off 7% of its staff to lower its costs, since HOOD has trimmed its guidance for 2023 GAAP total operating expenses to 2.345B-2.485B from the previous guidance of 2.375B-2.515B. In this way, HOOD might return to profitability especially with the growing interest in stock and crypto trading due to the improving macroeconomic outlook.
Breaking Out Of A Pattern
On the daily chart, HOOD stock successfully broke out of a falling wedge pattern and confirmed the break with a retest of the wedge’s trendline. With the stock forming higher highs, HOOD could witness an upward trend from current levels which is supported by the platform’s successes this year. For this reason, the HOOD stock forecast could be extremely bullish this year.
HOOD Financials
n its Q1 2023 report, HOOD’s assets increased 20% QoQ from $23 billion to $27.7 billion, while its cash and cash equivalents decreased 14% QoQ from $6.3 billion to $5.4 billion. HOOD’s total liabilities increased by 27% QoQ from $16.3 billion to $20.7 billion.
Revenue also increased 47% YoY from $299 million to $441 million. Operating costs increased almost 37% from $690 million to $950 million, which contributed to the operating loss increase of 30% YoY from $391 million to $509 million. As a result, HOOD’s net loss increased 30% YoY to $511 million.
Technical Analysis
HOOD stock’s trend is neutral with the stock trading in a sideways channel between $8.33 and $10.15 which it has broken recently. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is overbought at 74 and the MACD is bullish.
As for the fundamentals, HOOD has an upcoming catalyst in the closing of the X1 acquisition this quarter. Moreover, HOOD is expected to post its Q2 earnings on August 23 which are critical to confirm whether HOOD has been gaining market share from Coinbase or not.
HOOD Forecast
HOOD is currently seeing a lot of interest, with speculations of it gaining market share over its competitor in the crypto trading space Coinbase. Given HOOD’s efforts to cut its expenses with the last round of layoffs, the platform is actively improving its long-term profitability prospects which would be a major achievement for the company. Meanwhile, HOOD is actively trying to broaden its product offering by venturing into the credit card space with the planned acquisition of X1 which is set to be closed this quarter. For these reasons, the HOOD stock forecast appears to be bright this year.
Penafian
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