Over the past month, Robinhood has expanded beyond its commission-free trading roots with new products including Robinhood Chain and Robinhood Earn.
- Robinhood stock posted its best month in August, after closing up over 21%.
- The chain’s total value locked remains lower than other chains like Ethereum and Hyperliquid, but has been picking up steam.
- Following the firm’s August rally, Morgan Stanley raised Robinhood to overweight from equal weight, raising its price target to $150 from $124 on its growth outlook.
Robinhood’s latest rally has caught the market’s attention. Shares of Robinhood (HOOD) clocked its best month in the last six months, and edged higher on Tuesday after Morgan Stanley upgraded its rating of the stock to ‘Overweight’ and hiked its price target to $150. They believe that the company’s expanding product lineup is creating more ways to monetize its roughly 28 million customer base.
Robinhood Rallies 21% In August
HOOD shares broke above the key $100 level during the second half of August, when the stock began the month near $90 and jumped to an intraday high of about $112 on August 25. The stock closed up more than 21% in the month. However, despite giving back some gains in the final week of August, HOOD still finished the month with a sharp rise from its late July level near $86.
HOOD stock traded over 2% during the pre-market hours. On Stocktwits, the retail sentiment around HOOD remained in the ‘bearish’ zone, while chatter around it shifted to ‘normal’ from ‘low’ over the past day.
Why Morgan Stanley Turned Bullish On HOOD
On Tuesday, Morgan Stanley upgraded Robinhood to ‘Overweight’ from ‘Equal Weight’, implying a more bullish outlook on the stock. According to TheFly, analyst Michael Cyprys raised his price target to $150 from $124. From HOOD stock’s Friday close of $104, Morgan Stanley’s price target implies a 44% upside.
Robinhood Is Expanding Beyond Crypto And Trading
The analyst pointed to growing “evidence” that Robinhood’s expanded product lineup was improving the economics of its customer base, driving more assets and more activity per user.
The analyst added that it extended the runway for the company’s growth. Morgan Stanley saw multiple paths for Robinhood to grow revenue from over 28 million customers already on its platform, citing an improved growth outlook for the upgrade.
Over the past month, Robinhood has launched multiple products like the Robinhood Chain, a Layer-2 blockchain, and Robinhood Earn, and has come a long way from its original commission-free stock trading model.
Robinhood Chain Adds Another Growth Avenue
While the Robinhood Chain, launched in July, remained far smaller than Hyperliquid (HYPE) and Ethereum (ETH) in absolute total value locked (TVL), with roughly $740 million in TVL compared to $1.52 billion for Hyperliquid and $49 billion for Ethereum, it has outpaced both chains in the speed of its DeFi expansion.
In terms of the last 24 hours, Robinhood Chain’s TVL has surged by over 4% compared to the other chains, with its stablecoin market cap up over 7% in a week, the highest among the three chains. However, it remained well below Cronos (CRO), which has surged nearly 30% in the last 24 hours.
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