The share price of Robinhood (NASDAQ: HOOD) is experiencing increased investor interest as markets react to its inclusion in the S&P 500.
Notably, HOOD closed the last session trading at $101.25, down 1.6%, while year to date the stock has rallied over 150%. Meanwhile, in pre-market trading on September 8, Robinhood shares had risen 8.4% to $109.
The renewed interest comes after the announcement that the commission-free trading platform will join the benchmark index, replacing casino operator Caesars Entertainment.
Indeed, the inclusion represents a key step for the company, which gained prominence as a pandemic-era trading upstart. The move is expected to drive demand for HOOD shares as index-tracking funds adjust their portfolios to accommodate it.
On Wall Street, analysts are bullish on the stock’s outlook over the coming 12 months. According to TipRanks, 18 analysts have given HOOD a ‘Moderate Buy’ consensus rating. Out of the 18 analysts covering the stock, 12 issued buy ratings, five recommended holding, and one advised selling.
The average 12-month price target stands at $113.71, representing a potential 12.31% upside from the last closing price. Forecasts range from a bullish high of $160 to a bearish low of $48.
Robinhood stock fundamentals
Beyond Wall Street’s positive outlook and the S&P 500 inclusion, Robinhood is also supported by strong fundamentals. For instance, in the past quarter, the company reported stronger-than-expected second-quarter earnings.
It posted earnings per share of $0.42, beating analyst forecasts of $0.31, while revenue surged 45% year-over-year to $989 million, above the $908 million estimate. Net income more than doubled to $386 million, up 105% from a year earlier.
Customer growth remained robust, with funded accounts rising by 2.3 million to 26.5 million, above projections of 26.1 million. Investment accounts climbed 10% to 27.4 million. Total platform assets nearly doubled to $279 billion, boosted by deposits, acquisitions, and higher equity and crypto valuations.
Robinhood is also moving deeper into wealth management, positioning itself as a rival to established brokerages. Through incentives such as deposit matches and the acquisition of TradePMR, the company aims to close the gap with Coinbase.
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