• Robinhood (HOOD) was a much-hyped initial public offering (IPO) that faced controversies last year.
• Based on the price chart, HOOD shares are interesting despite their meme stock association.
• Don’t trade, invest in HOOD stock for a double.

Brokerage upstart Robinhood (NASDAQ:HOOD) traded higher Tuesday. The gain of 2.84% in HOOD stock also outpaced the Nasdaq’s bid by nearly 100 basis points.

Aside from broader market follow-through off last week’s corrective bottom, HOOD stock buyers found company-specific news to their liking. Robinhood announced the launch of a new debit card with “spare change” functionality on Tuesday. It allows users to round up transactions to the next whole dollar and invest the difference in assets of their choice.

This offering looks like a smart vertical offering by Robinhood. Following trading controversies over stocks and cryptos like GameStop (NYSE:GME) and Dogecoin (DOGE-USD), the card is one small step toward building a more sustainable and holistic brand.

Now, let’s look beyond today’s headlines at what bears, bulls and price action in HOOD stock are saying, then offer a risk-adjusted determination aligned with those findings.

The Bears Rip Into Robinhood

You couldn’t see HOOD stock as a lay-up for bears last summer. But less than a week after its $38-per-share August IPO and a rally of more than 150%, gravity and multiple expansion undoubtedly worked in favor of a short on the brokerage.

As of yesterday, and some 72% beneath HOOD’s high-water mark of $85, some still see shorting shares as a good idea. Roughly 12.5% of Robinhood’s float was shorted and requiring 2.4 days for bears to cover.

Some of the unwavering bearish commitment likely has to do with Robinhood’s association with the aggressive trading in meme stocks.

Last year’s prolific trading scheme ultimately delivered profits for a few and took from many more. And in the process, Robinhood’s “equities revenue” took a large 35% hit year-over-year in Q4 as traders abandoned the hobby in favor of other activities.

Other bears still growling at HOOD stock might warn declining average revenue per user (ARPU) and regulation could cut down Robinhood’s transaction-based revenues. They might also argue “gamifying” business practices are headwinds to a worthwhile investment.

The Bulls Have Got Game in HOOD Stock

Source: Charts by TradingView

Despite some of HOOD’s challenges, Robinhood still managed to grow its total revenues by 89% in 2021. And as InvestorPlace’s David Moadel notes, monthly active users (MAU) jumped by 48% to 17.3 million in the fourth quarter.

Further, HOOD stock is trading at a historically low price-to-sales multiple near 6. Lastly, on the Robinhood price chart, bullish investors have found more than just tough talk in a chatroom to support buying HOOD stock.

Technically, shares of HOOD have successfully confirmed a double-bottoming breakout of its lifetime downtrend. With the price action supported by a favorable weekly stochastics indicator, it could reasonably mark the beginning stages of a new bull market.

Don’t expect shares to revisit $85 anytime soon. But a double to perhaps a triple over the next 12 to 18 months is quite possible based on HOOD stock’s weekly price chart before resistance comes into play.

Yes, You Should Buy HOOD Stock

Given the evidence, by no means is HOOD stock the so-called perfect investment. And shares are less appealing today, as profits from a year ago have disintegrated into losses the past two quarters.

But unlike the notorious stocks on its trading platform that Robinhood is famous for, its membership as a meme stock doesn’t preclude a second and more meaningful chapter.

And if investors are looking to fill a void in their portfolio, which might need a smaller large-cap pick or a contrarian-style investment, HOOD stock is worth considering right now.

On the date of publication, Chris Tyler 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.