Why the bulls are wrong over Robinhood Market's shares (Hood)

It is really difficult to bet against Robinhood Markets (Hood) stock. This year by 155% and more than 308% in the past twelve months, the commission-free trading platform has recorded an extreme reassessment, which was heated by the crypto rally and the rapid expansion of the product offers and the user base. In the first half of 2025, the most recent price campaign showed a monumental level of performance that exceeds the main role by ~ 300%.

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The spark, which lit the new optimism, was the introduction of “stock tokens”, with which users were able to trade digital stocks of traditional shares and even private companies. This step has once again sparked the optimism in relation to Robinhood's long -term growth history and brought the share to new heights, creating the feeling of disruptive innovation that could change the functioning of the financial markets.

On the other hand, Despite this strong bullish dynamic, Robinhood acts with very stretched reviews that have characteristics of a speculative bubble. What contributes to my skepticism is the strong correlation of the stock with the volatile cryptom market, which makes its performance susceptible during the crypto decades, especially in view of the fact how much of its price the expectations of explosive growth reflects.

Therefore, despite the current swing a Hold Evaluation of Robinhood. It is important to carefully check whether this massive rally, which has lasted for more than a year, is really sustainable or whether it is a speculative increase in the short term.

Robinhoods big bet on mixing stocks and crypto

Robinhood share has recently beaten waves and has reached all high-highs, which is not too surprising in view of its strong correlation with cryptocurrencies and has pushed the insoles for the record net funds of users. In addition, the broader market volatility in raw materials, stocks and solid yields has increased the trading volume for retail brokers.

In particular, the real catalyst behind Robinhoods is very interesting in the past thirty days, and it is the significant expansion of its product line, known as “Stock -Token”.

This new product offers blockchain-based digital representations of real shares, including prominent names such as Nvidia (NVDA) and Apple (AAPL) as well as private companies such as Openaai and SpaceX.

Simply put, Robinhood tries to combine traditional financing (stocks) with cryptocurrency technology by offering tokens that represent fractional stocks of real shares. These tokens can be traded around the clock regardless of market lessons and also offer access to private companies.

In my opinion, the optimistic reaction to the potential for disruptive shift is bound both on the crypto world and on the financial markets. Although this strategy does not compete with Bitcoin (BTC) as a value memory, Blockchain technology uses to create synthetic financial markets. This makes crypto for mainstream investors more relevant and could bring millions of new users to the crypto ecosystem by using wallets, stable coins and other infrastructure to keep them tokens.

Potential disadvantages of Robinhoods token plan

The restriction is that Robinhood only offers “tokenized” stocks of private companies in Europe, since stricter regulations in the US Openai quickly distanced themselves, and said: “These tokens are not our equity, we do not work with Robinhood and we do not support this.”

What Robinhood really sells is indirect exposure by a special purpose vehicle (SPV), which has the actual shares and then outputs tokens that pursue their value. So investors do not have the actual stocks directly – Intead, they have a derivative like an option or a tracking share. If this entire setup collapses due to poorly managed SPVs or legal prohibitions, it could undermine confidence in the concept of tokenization.

However, analysts seem to be quite optimistic about this new product expansion, especially in the long term. In the past month, the EPS CAGR projections rose from 11.5% to 12.5% for the next five years, while sales projections rose from 9.1% to 10.1%.

In my opinion, this positive revision in expert estimates explains why Hood is doing new heights, but also why she acts with an even higher multiple dealer to justify his value.

Bubble warning for Robinhood's sky-high rating

In my opinion, Robinhood trade is similar to a bladder with all-time highs. Even the market consensus for the next five years, which already implies strong, robust growth, does not really justify the current share price. With regard to multipliers, Hood deals with a profit of 64x, more than 6 -times in the industry average. And even if the average long-term EPS-CAGR is taken into account, the PEG ratio remains extreme.

In addition, Robinhoods to be accompanied by an EPS growth of 12.5% is estimated to be 10.1% and an EPS growth of 12.5%, at $ 17 billion. This calculation is based on sales of 1.13 billion US dollars in the previous year and an operating margin of 39% with stable tax rates, no changes to the operating capital, a constant growth rate of 3% and a weighted average costs of the capital (WACC) of 7.5%. If we look at the current market capitalization of almost 87 billion US dollars, investors can be assigned if you think that Hood shares are overpriced.

In other words, the model would have to take over a constant growth rate of ~ 7% in order to find a security breakdown in the current rating, which is very incoherent for every company, in particular a trading platform that is so closely connected to crypto impulse fluctuations.

Is Robinhood a purchase, hold or sale?

Most of the Wall Street experts remain optimistic about Robinhood shares. Of 20 analysts that cover the shares in the past three months, 14 are bullish, five are neutral and only one is bearish. However, Hood's average price target is $ 79.84, which implies a potential disadvantage of around 20% compared to the current share price.

Low volatility endangers Robinhood's long -term livelihood

The market has drastically re-evaluated Robinhood this year, driven by a bullish crypto mood and potentially disturbing steps in terms of blockchain technology that attracts millions of new users for crypto toilet. In addition, geopolitical disputes, which were illustrated by developments in relation to Donald Trump, China, Iran and Russia, have increased volatility across the board.

For retail brokers such as Robinhood, higher volatility is almost a direct path to higher income and gain. In view of the fact that the first six months of 2025 of a roller coaster are similar (including a significant sale of 20% in S&P), Robinhoods rings the rang.

While the story about Robinhood is undoubtedly exciting, the evaluation is anything but. In my opinion, there is regardless of how strong the bullish dynamic may be, there is practically no security edge on the current level-die opponent shows clear signs of bladder-like behavior.

This means that with the trajectory of the stock, which is so closely associated with Crypto and Bitcoin dynamics, the attempt to combat the trend does not seem to be wise at this point. At the moment I am entertaining one Hold Rating for Robinhood share.

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