Robinhood Markets Inc (NASDAQ:HOOD) shares are pulling back Wednesday afternoon, despite a lack of company-specific news for the session. Here’s what investors need to know.
What To Know: The company’s stock has gained some 176% on a year-to-date basis, fueled by a strong second-quarter performance and growing optimism around its cryptocurrency and tokenization plans.
In its second-quarter report, Robinhood reported that its total net revenues grew to $989.0 million, beating analyst estimates, and its transaction-based revenue was up 65% year-over-year.
A key driver of this growth was its crypto revenue, which more than doubled. The company also announced a strategic acquisition of Bitstamp, a crypto exchange, to further expand its crypto offerings.
CEO Vlad Tenev has been a vocal proponent of tokenization, suggesting it could make Robinhood’s revenue “rather large” by enabling the trading of tokenized real-world assets like stocks, real estate and art.
This sentiment is particularly relevant given recent developments from the SEC, which is outlining a new regulatory framework that could benefit companies like Robinhood, Coinbase and Circle.
The SEC’s initiative aims to provide clearer rules for digital assets, stablecoins and tokenized securities, potentially paving the way for broader adoption and innovation in the crypto space.
This past week also featured insider selling at Robinhood, with Director Baiju Bhatt selling 1.58 million shares for approximately $157.9 million and Chief Legal Officer Daniel M. Gallagher Jr. selling 225,000 shares valued at about $22.5 million.
Benzinga Edge Rankings: According to Benzinga Edge stock rankings, which assess stocks across four critical categories, Robinhood displays a profile of a high-momentum growth stock with significant valuation concerns.
The stock earns an exceptionally strong Momentum score of 99.03, reflecting its powerful recent price appreciation. It also shows very strong Growth characteristics with a score of 91.78.
Conversely, its Value score is extremely low at 10.15, suggesting the stock is considered expensive based on fundamental valuation metrics.
Price Action: According to data from Benzinga Pro, HOOD shares are trading lower by 4.46% to $108.94 during Wednesday’s session. The stock has a 52-week high of $117.70 and a 52-week low of $18.57.
Read Also: Tom Lee: Ethereum Is ‘The Biggest Macro Trade’ For The Next 10-15 Years
How To Buy HOOD Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Robinhood Markets’ case, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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