Robinhood Trade Idea as Wall Street Offers New Price Targets

Robinhood

On Tuesday, Robinhood Markets  (HOOD)  popped for a gain of 10.4%. On Wednesday morning, the shares are trading sharply higher yet again. 

For one, HOOD shares popped in response to the company having already expanded its platform to include Kalshi's prediction markets back in the spring of 2025. Kalshi and competitor Polymarket have surged in popularity this year and are pushing for influence in Washington as legislators consider regulating the pace. Trading volumes in these markets in platforms such as Robinhood are on pace to more than quadruple in 2026. There are estimates that this burgeoning corner of the retail trader space could generate revenues of $1 trillion within four years.

That's Not All...

On Tuesday, the U.S. Securities and Exchange Commission (SEC) approved FINRA's proposal to replace the Pattern Day Trader framework with real-time intraday margin standards. 

The old FINRA rule stated that pattern day traders had to maintain a minimum account balance of $25,000. This has reduced the numbers of smaller retail investors and traders who could participate but also protected beginners from hurting themselves. This rule was implemented in 2021 the wake of the burst of the dot-com bubble of the late 1990s.

Wall Street

This week alone, the community of sell-side analysts have been on Robinhood like white on rice:

• David Smith of Truist Financial reiterated his "buy" rating on HOOD while dropping his target price from $120 to $100. Smith reiterated his new target price a day later. Smith is rated at four stars out of five at TipRanks.
• Gautam Chhugani of Bernstein reiterated his "buy" rating on HOOD as well as his $130 target price. Chhugani is rated at five stars out of five at TipRanks.
• Patrick Moley of Piper Sandler reiterated his "buy" rating on HOOD as well as his $135 target price. Moley is rated at five stars out of five at TipRanks.

Earnings

Robinhood is expected to report the firm's first quarter financial results in about two weeks. Expectations are for a GAAP EPS of $0.41 on revenue of $1.15 billion. Results like this would compare well to the $0.37 reported for the year-ago period while reflecting annual revenue growth of more than 24%. To this point, interestingly, 12 sell-side analysts have reduced their earnings estimates since the start of the quarter, while just one estimate has been revised higher.

The Chart​

Readers will see that HOOD is trying to break out from a basing period with an $85 pivot. This came after a descending-triangle pattern of bearish continuation. Relative strength has improved dramatically while the daily MACD is now postured more bullishly than it was. The histogram of the nine-day EMA is now in positive territory. In addition, though the 12-day and 26-day EMAs are still in negative territory, the 12-day line has crossed above the 26-day line and that is a bullish signal.

Lastly, the stock is potentially headed toward a mini-golden cross, which is the 21-day EMA moving above the 50-day EMA. This can provoke swing traders who in theory could force a move above pivot. Instead of risking capital, investors may want to try an earnings-focused bull call spread. 

An example, in minimal lots, would be something like this:

• Purchase one May 1 $85 call for about $6.00
• Sell (write) one May 1 $95 call for roughly $2.50

Net Debit: $3.50

Note: This trader would be risking the net debit of $3.50 to try to bring back $10.00 for a max profit of $6.50, which would be a 185% profit.

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At the time of publication, Guilfoyle had no positions in any securities mentioned.