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Robinhood Stock Rises; Analysts Initiate Coverage, Laud Potential

Shares of Robinhood were higher as analysts, initiating coverage, lauded the investment platform's potential.
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Shares of Robinhood  (HOOD) - Get Free Report were higher as analysts, initiating coverage, lauded the investment platform's potential, even after last week's disappointing earnings report

At last check Robinhood stock was trading up 4.1% at $44.40. The company started trading at the end of July.

Citigroup's Jason Bazinet rated the Menlo Park, Calif., company buy with a $63 price target.

Robinhood has succeeded by targeting U.S. households that aren't as invested in the market and whom the brokerage industry hasn't traditionally tried to attract, the analyst said.

And he says slowing growth has already been built into the stock's price. 

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KeyBanc's Josh Beck rates the stock overweight with a $55 price target. "While we do not expect the journey to be linear following [an about 17 times] increase in users the last four years, we believe Robinhood is poised to become a FinApp leader," he said.

Barclays analyst Ross Sandler initiated coverage of the stock with an equal weight rating and $50 price target.

"Every company in fintech is chasing the Alipay  (BABA) - Get Free Report ‘super-app’ concept and, with the highest engagement and NPS in the space, we think HOOD stands about as good a chance as any to get there," he wrote.

The firm also notes, however, that there's a lot of regulatory uncertainty, especially when it comes to payment for order flow, Bloomberg reported. 

Deutsche Bank's Brian Bedell started the company at hold with a $45 price target. The firm sees Robinhood's management investing heavily to execute its growth strategy, which could lead to volatility over the next six to 12 months.

Despite the volatility, Bedell sees Robinhood's potential as "extremely attractive."

J.P. Morgan's Kenneth Worthington rates Robinhood underweight with a $35 price target. The company's success at "breaking into the very competitive retail U.S. brokerage business" is already being priced into the stock, he says.