Robinhood stock price continued its strong bull run and is slowly nearing its all-time high.
- Robinhood share price has jumped by 440% in the last 12 months.
- The company’s business is doing well, with its revenue and profits rising.
- Technical analysis points to a potential reversal.
Robinhood has jumped by 440% in the last 12 months, bringing its market capitalization to over $130 billion. It has soared by almost 2,000% from its all-time low in 2022.
Why HOOD stock has surged
HOOD stock has had numerous catalysts this year. It recently entered the blue-chip S&P 500 Index, where it has become the best-performing constituent company.
The company also published strong financial results. Its most recent numbers showed that its assets under custody jumped by 118% in the second quarter to $19 billion.
Robinhood’s revenue jumped by 45% to $989 million as the number of transactions in the platform soared. It transaction revenue was $539 million, while the net interest income rose to $357 million.
The company has also benefited from its cryptocurrency investments. Its crypto revenue rose by 98% in the second quarter, faster than other companies like Kraken and Coinbase.
Robinhood has also moved deeper into the crypto industry by launching over 500 tokenized stocks and ETFs for its European clients.
It used Arbitrum (ARB) network, although its main goal is to launch its layer-2 network. Coinbase launched Base in 2023, a network that has become the biggest player in the industry.
Analysts anticipate that Robinhood’s business will continue doing well as the soaring stock market drives more customers to its platform.
The average estimate among analysts is that its third-quarter revenue will be $1.21 billion, up by 90% from what it made last year. Its annual revenue is expected to be $4.2 billion, up by 44% from last year.
The main fundamental risk is that the HOOD stock is highly overvalued. Its forward price-to-earnings ratio has moved to 70, much higher than the S&P 500 average of 22.
HOOD stock price analysis
The daily timeframe chart shows that the HOOD stock price has been in a strong bull run in the past few years. While this rally may continue, the stock has potential risks.
One of the risks is that it is about to form a double-top pattern at $154 and a neckline at $120. A double-top is one of the riskiest patterns in technical analysis.
The other risk is that it is much higher than the 100-day and 200-day Exponential Moving Averages. This means that it may soon go through mean reversion, where an asset moves back to its historical averages. Therefore, the Robinhood stock may retreat ahead or after its earnings on Nov. 5.
