Editor’s note: This article was updated on July 29 to specify Robinhood’s relationship with Citadel Securities.
Robinhood (NASDAQ:HOOD) has officially hit the public markets, and both loyal Redditors and legacy analysts are paying close attention. The first few hours of trading of HOOD stock have not been particularly successful. In fact, shares are down roughly 4% from the $38 offering price. However, one name on Wall Street was eager to get ahead of the crowd, and he sees significant gains ahead. So what do you need to know about the latest Robinhood stock price predictions?
Importantly, the market is not quite sure what to make of the Robinhood IPO. The online brokerage represents a major investing revolution in that it tapped into a new market of retail investors. Robinhood also majorly disrupted competition, leading the way with commission-free trading and forcing its rivals to follow suit.
In that regard, the company has become synonymous with r/WallStreetBets and retail day traders. However, as InvestorPlace contributors have highlighted throughout the day, not everyone is a fan of HOOD stock. Regulatory threats, its actions during the GameStop (NYSE:GME) and Dogecoin (CCC:DOGE-USD) sagas, as well as its relationship with Citadel Securities, have turned many sour.
This tricky dynamic may be complicating the first trading day, but it is not deterring Atlantic Equities analyst John Heagerty. On Wednesday night, he came out with a $65 price target, implying more than 70% upside from its offering price. While Heagerty acknowledges the role Covid-19 played in helping Robinhood soar, it seems he believes a lot more is around the corner.
Robinhood Stock Price Predictions Count on New Growth
So where does Heagerty get his bullish target from? Importantly, he is counting on two factors. The first is that, although Robinhood has already delivered significant user growth in the last year, he believes more is in store. He cites its popularity among its target demographic as well as its referral program as evidence.
Heagerty also believes that through new innovation, Robinhood can start to increase the revenue it earns per user, making it more competitive in the financial space.
Importantly, InvestorPlace analyst Luke Lango is tracking what Heagerty has to say, pointing to Robinhood as a leader on Wall Street. Plus, the company has already demonstrated its 10x potential in democratizing investing. Lango says:
“Robinhood had some optical risks surrounding the GameStop saga earlier this year, but bad optics always fade. Indeed, those bad optics have already faded. Ask someone on the street about Robinhood today, and they’ll tell you how much they love the trading app without mentioning anything about GameStop. That’s what matters here. Robinhood has leveraged technology to create a trading platform that is 10X faster than traditional trading platforms, 10X more convenient, 10X more accessible, and 10X cheaper. They’ve democratized investing, at a time when the world is starting to become obsessed with investing. Sure, lots of other brokerages are now launching apps and cutting their commissions to zero — but they’re all playing catch-up to Robinhood. I like to invest in leaders, not followers. Robinhood is THE leader in the democratization of investing movement — and I see the company being worth a lot more than its IPO valuation one day.”
So what is the bottom line? Robinhood has to deliver continued growth, but if it can, plenty of big names on Wall Street are betting it can succeed.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.