Robinhood stock pared gains Wednesday after the digital broker received an upgrade from Wolfe Research. Meanwhile, Robinhood (HOOD) hosted its annual meeting Wednesday at 12:30 p.m. ET.
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Wolfe Research on Wednesday upgraded Robinhood stock to outperform from peer perform following a meeting with CFO Jason Warnick. The firm was "more constructive" regarding the strength of Robinhood's earnings growth ramp following the meeting. A team led by analyst Steven Chubak wrote that they see "durable" 30% GAAP earnings growth runway for the mobile broker, driven by 20% net deposit growth and 5% account growth. Robinhood also has significant operating leverage and strong free cash flow, according to the firm.
Wolfe Research said that Wall Street estimates are "much too low."
The firm's 2026 GAAP earnings forecast for Robinhood is 70% above consensus expectations. Wolfe Research has a $29 price target on Robinhood stock, implying about a 30% upside.
The firm noted that the upgrade is not a bullish view on cryptocurrency price appreciation, meme stock resurgence or, "anything 'Roaring Kitty'," in reference to GameStop (GME) meme trader Keith Gill.
"Recent share spikes (and declines) linked to meme/crypto optimism are simply noise and have no bearing on our positive view," Wolfe wrote.
Robinhood Stock Jumps
HOOD stock pared gains to to just 0.8% Wednesday. Shares spiked nearly 8% after the open.
A weekly MarketSurge chart shows the stock is in a four-weeks tight pattern, about 10% below a 24.28 entry. The stock broke above the its short-term, 10-day moving average, which presents an early buying opportunity for aggressive investors.
Shares have scored breakouts in December, February and May. HOOD stock vaulted nearly 75% this year through Wednesday.
Robinhood is extended slightly above a buy zone following a late May breakout.
You can follow Harrison Miller for more stock news and updates on X/Twitter@IBD_Harrison
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