Why Robinhood Stock Is Up By 25% Today

Key Insights

• Robinhood launches new extended hours. 
• The company says that it is working towards 24/7 investing. 
• Analyst estimates may move higher as new trading hours should boost revenue.

Robinhood Stock Rallies After The Company Extends Trading By Four Hours

Shares of Robinhood gained strong upside momentum after the company announced that it decided to extend trading by four hours.

Robinhood noted: “By expanding pre-market trading to 7 a.m. from 9 a.m. ET and after-hours trading to 8 p.m. ET, we’re adding an extra four hours for orders to be filled”. Previously, the company offered extended hours trading from 9 a.m. to 9:30 a.m. ET and 4 p.m. to 6 p.m. ET. Robinhood also noted that it was working towards offering 24/7 investing.

The market’s reaction was very strong, and the stock was up by 25%. The recent rally in meme stocks like GameStop and AMC may have also provided some support to Robinhood stock.

What’s Next For Robinhood Stock?

The company’s decision to boost trading hours will increase its revenue, so it’s not surprising to see that traders decided to buy the stock on the news.

Currently, analysts expect that Robinhood will report a loss of $1.26 per share in the current year and a loss of $0.77 per share in the next year, so the company is not expected to become profitable in the near term.

Robinhood stock declined from the $85 level in August 2021 to the $10 level in mid-March 2022, so the company feels the pressure to boost revenue and get closer to profitability.

It remains to be seen whether analyst estimates will materially improve in the upcoming weeks, but Robinhood is clearly making a move in the right direction. At the same time, it should be noted that the stock will likely remain highly volatile in the upcoming trading sessions as traders will try to evaluate whether the strong upside move was justified.

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