Shares of financial services platform Robinhood (HOOD) are up in today’s trading as investors await its Q4 earnings results on February 12 after the market closes. Analysts are expecting earnings per share to come in at $0.43 on revenue of $934.9 million. This equates to 1,333.33% and 94.4% year-over-year increases, respectively, according to TipRanks’ data.
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Interestingly, though, Robinhood may not be done growing yet. Indeed, 4.3-star Mizuho analyst Dan Dolev recently surveyed 107 Robinhood users and found that many are interested in using the app for sports betting. More specifically, 78% of users said they would be interested.
Although Robinhood’s sports betting plans are currently on hold, it is a potential growth opportunity for the company. Nevertheless, Mizuho still increased its estimates for Robinhood due to the company’s strong performance in cryptocurrency trading. As a result, Dolev raised his price target from $60 to $65 and kept his Buy rating on the stock.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see that options traders are expecting a 12% move from HOOD stock in either direction right after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement.
It’s worth noting that HOOD’s after-earnings price moves in the past 12 quarters have mostly been smaller than the 12% that is expected. This implies that current option prices might be overvalued.
Is HOOD Stock a Buy, Sell, or Hold?
Overall, analysts have a Strong Buy consensus rating on HOOD stock based on 12 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 370% rally over the past year, the average HOOD price target of $53 per share implies 6.1% downside risk.
