Online trading platform Robinhood (NASDAQ:HOOD) is diversifying its offerings with the launch of its credit card. This move marks a significant step for the company, signaling its evolution into a comprehensive financial services provider. Investors reacted positively to the announcement, with HOOD stock increasing over 5% in Tuesday’s after-hours trading.
Robinhood aims to drive user engagement and monetization by entering the credit card market. Notably, the credit card is exclusively for its gold members (premium tier). Thus, its adoption will expand HOOD’s premium tier user base and facilitate the company’s expansion within the personal finance market.
Robinhood’s focus on new products and services bodes well for its long-term growth prospects. In February 2024, Mizuho Securities analyst Dan Dolev observed that HOOD’s new offerings, including the retirement product, are gaining traction and beginning to have a significant impact. These initiatives bolster Robinhood’s competitive standing in the fintech industry and position it well to deliver sustainable growth. Dolev is bullish on HOOD stock.
Is Robinhood a Buy, Sell, or Hold?
Robinhood stock has risen about 124% in one year, driven by higher trading volumes on its platform. The momentum in Bitcoin (BTC-USD) and other cryptocurrencies has also positively impacted HOOD’s business.
However, as Hood stock has gained significantly, Wall Street prefers to remain sidelined near its current levels. Robinhood stock sports a Hold consensus rating based on four Buys, six Holds, and three Sell recommendations. Analysts’ average price target on Hood stock is $16.58, implying a downside potential of 14%.
