As we bid goodbye to President Joe Biden and start looking toward the oncoming Donald Trump era, it is a crucial time for investors. With a new administration comes a new set of policies that can completely turn around an industry or sector, and one such example is the cryptocurrency market.
The Biden administration has been mostly anti-crypto, but now with Trump back at the top, crypto is expected to pick up pace as seen by Bitcoin (BTCUSD) racing past the $108,000 mark following his reelection. Additionally, Trump’s pick to chair the Securities and Exchange Commission, Paul Atkins is known for being friendly to crypto. Trump also named tech venture capitalist David Sacks as the crypto czar – another appointment that has crypto investors in a state of excitement for the future.
With this in mind, Mizuho analysts have been keen on Robinhood (HOOD), going so far as to dub it the “perfect” buy under Trump’s administration. Let’s take a look at why.
About Robinhood Stock
American company Robinhood (HOOD) is known for providing brokerage services to retail investors. Through its online platform, users can invest in stocks, funds, gold, and options.
Situated in Menlo Park, California, the company’s stock has more than tripled this year. Down about 5% from its 52-week high, HOOD shares are creating an opportunity for new investors.
Mizuho’s Verdict on HOOD
In an interview with Yahoo’s Brian Sozzi, Mizuho analyst Dan Dolev was bullish on Robinhood, pointing to the company’s room for growth and undefeated brand name. Dolev set a $60 price target on the stock, reflecting upside potential of more than 50% from market levels, and labeled it “an amazing brand.” Dolev said that he sees several ways for the company to “10x” its business.
In a different interview with Sozzi, Robinhood’s CEO and Co-Founder Vlad Tenev said that the appointment of Paul Atkins as the head of SEC would help crypto companies. Tenev also expects an end to the regulation-by-enforcement approach in the crypto industry.
Robinhood Reports Third-Quarter Results
Robinhood reported its third-quarter results in October. It posted revenue of $637 million, up 36.4% year-over-year, but missing analyst estimates of $658.2 million. Earnings for the quarter came to $0.17 per share, again missing estimates of $0.18 per share.
During the quarter the company posted earnings before interest, taxes, depreciation and amortization (EBITDA) of $268 million, slightly lower than the estimated $274.2 million. The operating margin for the quarter came to 65.1%, down 15.5% year-over-year while the gross margin increased to 86% from last year’s 82.9%. The company ended the quarter with a cash balance of $4.6 billion, down slightly compared to last year’s $4.9 billion.
How Do Analysts Rate HOOD?
Analysts' view on the stock has shifted bullish as seen by the consensus “Moderate Buy” rating and a mean price target of $40.94 signifying an upside potential of 4%.
A total of 17 analysts are covering the stock, with 10 “Strong Buy” ratings, 2 “Moderate Buy” ratings, 4 “Hold” ratings, and 1 “Strong Sell” rating.
