Why HOOD Could Be a Good Stock to Buy at Current Prices

Robinhood Markets (HOOD) has undergone a remarkable transformation that challenges the popular narrative about the company. Once dismissed purely as a meme-stock-trading app, the platform has evolved into a legitimate financial services competitor comparable to established players like Fidelity. The 50% pullback from its peak valuations presents an opportunity for investors to evaluate whether HOOD represents a compelling investment at present levels.

The digital brokerage has demonstrated exceptional growth momentum, with its stock up 650% over the past two years—a performance that eclipsed many artificial intelligence darlings including Nvidia. While the recent correction represents healthy consolidation after an aggressive rally, the company’s operational momentum remains intact. With Q4 earnings recently reported and a diversified business model generating substantial revenues across multiple channels, HOOD’s fundamentals suggest there may be legitimate reasons to consider it as a good stock to buy.

The Evolution Beyond a Retail Trading Platform

For many investors, HOOD remains synonymous with commission-free retail trading and the volatility associated with meme stocks. However, this perception significantly underestimates the company’s current scope and sophistication.

Robinhood achieved S&P 500 inclusion in September, formally recognizing its status as a major financial institution rather than a niche trading app. The company now operates 11 distinct business lines, each generating approximately $100 million or more in annual revenue. This revenue diversification spans retirement accounts, cryptocurrency trading, derivatives markets, institutional-grade desktop platforms, wealth management services, and even prediction markets positioning the company as a competitor to established players like Polymarket.

The user base reflects this expansion. Gold Subscribers—paying members with enhanced trading capabilities—surged 77% year-over-year in Q3 to reach 3.9 million. Meanwhile, total investment accounts climbed 2.8 million (11% growth) to 27.9 million. These metrics indicate that HOOD has successfully expanded its appeal beyond early-stage retail traders to encompass a broader investor demographic.

Growth Metrics That Support a Bullish Case

The financial performance provides substance to HOOD’s strategic positioning. Average revenue per user climbed an impressive 82% to $191 during Q3, while total quarterly revenues surged 100% year-over-year. Earnings per share jumped 259% to $0.61, marking the fourth consecutive quarter of material beats relative to analyst expectations—averaging 26% above consensus forecasts.

These results form the foundation for optimistic forward guidance. Management projects adjusted EPS expansion of 85% in 2025, with an additional 23% increase anticipated for 2026, reaching $2.48 per share. This contrasts sharply with a $0.60 loss position in 2023 and $1.09 earnings in 2024, illustrating the dramatic earnings trajectory. The 2026 earnings outlook has appreciated 9% in recent months and 63% since mid-2025, suggesting analyst confidence continues strengthening.

Revenue growth expectations align with this earnings expansion. HOOD is projected to achieve 53% revenue growth in 2025 and 22% growth in 2026, with revenues reaching $5.50 billion by 2026 compared to $2.95 billion in 2024. This represents a near doubling of the revenue base, indicating operational leverage embedded in the business model.

Why Current Valuations Attract Contrarian Investors

From a valuation perspective, HOOD’s selloff has repositioned the stock into territory that may interest value-conscious investors seeking a good stock to buy. The shares currently trade approximately $75, while analysts’ average price target implies 86% upside potential. Put differently, achieving consensus expectations would require the stock to roughly $139, presenting a meaningful asymmetric reward opportunity.

On a forward earnings multiple basis, HOOD trades at 35.7X, representing a 60% discount to its peak valuation. The price-to-earnings-growth (PEG) ratio has contracted to 1.3, a 75% discount from its highs and roughly equivalent to the Zacks Technology Sector average. This relative valuation improvement contrasts with HOOD’s outperformance since its IPO—the stock has risen 130% versus the broader tech sector’s 70% advance.

Technical Positioning Reinforces the Opportunity

From a technical perspective, HOOD exhibits characteristics suggesting potential upside. The stock is currently testing support levels established during the 2021 post-IPO breakout period, a significant technical level that has historically attracted buyer interest. Additionally, the Relative Strength Index (RSI) has reached historically oversold extremes, a condition that has often preceded recovery rallies in the past.

The recent recovery attempts hold these technical support levels, suggesting institutional interest in accumulating shares at discounted prices. While technical analysis never guarantees future results, the combination of technical support and valuation dislocations creates the type of setup that typically generates interest among both traders and longer-term investors.

Should You Buy HOOD Stock? The Investment Perspective

The central question—whether HOOD represents a good stock to buy—cannot be answered with certainty by analyzing fundamentals, technicals, and valuations alone. However, the combined weight of evidence supports a case for selective buying:

Growth Profile: Earnings and revenues are expanding at rates that exceed most established financial services firms, despite the company being publicly traded for only several years.

Business Diversification: The progression from single-product mobile app to 11-line revenue generator reduces concentration risk and appeals to institutional capital seeking stability alongside growth.

Valuation Reset: The 50% pullback has eliminated premium multiple expansion, potentially positioning shares for re-rating once market sentiment normalizes following positive earnings results.

Technical Support: Multiple technical levels provide potential support, suggesting asymmetric risk-reward dynamics favoring potential upside.

That said, investors should recognize that the technology sector, digital asset sentiment, and macroeconomic conditions remain relevant considerations. The company operates in regulated markets subject to policy changes, and market sentiment regarding artificial intelligence, cryptocurrency adoption, and retail investor participation could shift rapidly.

For investors considering whether HOOD is a good stock to buy at present levels, the confluence of reasonable valuations, strengthening fundamentals, and technical support creates a reasonable foundation for building a position. However, individual risk tolerance, investment timeline, and portfolio composition should guide position sizing decisions.