Robinhood Markets’ HOOD stock rose Wednesday after several Wall Street firms reaffirmed their bullish outlook on the online brokerage, insisting the company’s growth prospects remain strong.
This bullish outlook comes despite planned layoffs affecting around 10% of the company’s workforce.
The company’s shares rose more than 12% in intraday trading after Deutsche Bank and Argus Research raised their price targets for the company.
The analyst upgrade comes on the heels of Robinhood announcing a restructuring plan that will eliminate approximately 290 full-time positions and a small number of open positions.
The company stressed that the move was not caused by the economic downturn.
“The company is taking this action given the strength of its business, including record levels of average daily trading volume across stocks, options, and prediction markets in June year-to-date,” Robinhood said in a statement.
Analysts raise targets on strong business momentum
Deutsche Bank raised its price target on Robinhood stock to $105 from $103, but maintained its Buy rating on the stock.
The bank cited strong underlying business momentum, noting that average daily trading volumes reached record levels across multiple trading categories in June.
Deutsche Bank said management indicated the operational changes were made to build on its strengths rather than in response to slowing growth.
Analysts said the increased trading activity reflects continued engagement from retail investors and supports the company’s long-term growth prospects.
Argus Research also raised its price target, raising its forecast from $90 to $110, while maintaining a buy rating.
The company expects Robinhood to remain in a high growth phase for several years as it continues to add intermediary customers and expand its product lineup.
Analysts believe the company’s expansion of investment and financial services products will maintain customer engagement and drive future revenue growth.
Robinhood has steadily expanded beyond commission-free stock trading into retirement accounts, subscription products, prediction markets, and other personal financial services.
We are seeing a reduction in personnel due to efficiency improvements.
Robinhood expects to record approximately $20 million in restructuring charges related to severance and employee benefits and approximately $8 million in stock-based compensation expense during the second quarter.
Rather than viewing the layoffs as a negative, analysts see the move primarily as an effort to improve efficiency.
Argus said the job cuts could help remove layers of organization, speed up decision-making and improve product development.
The restructuring reflects a broader trend across the technology sector as companies continue to balance cost control with investing in future growth opportunities.
While companies like Snap, Block, Atlassian and Pinterest have also announced layoffs this year, technology remains a key source of hiring plans.
Employers announced plans for more than 11,000 tech hires in May, even as companies continue to restructure their organizations, according to Challenger, Gray & Christmas.
For investors, record trading activity, expanded product offerings, and increased projected market returns continue to support optimism about Robinhood’s long-term growth trajectory.
