Jim Cramer predicts further gains for Robinhood stock: Here’s why

Renowned investor Jim Cramer is optimistic about Robinhood’s future, predicting further gains for the stock in the coming days.

Despite a modest rise in Robinhood Markets Inc.’s stock price on Thursday, the company’s recent earnings report exceeded Wall Street’s expectations for Q2. 

Robinhood Q2 earnings report 

Robinhood’s second-quarter performance showcased a robust 69% year-over-year growth in transaction-based revenue, driven by increased trading in both stocks and cryptocurrencies. 

The resurgence of the meme stock phenomenon also contributed to the firm’s impressive quarterly results.

Cramer, speaking on CNBC’s “Squawk on the Street,” highlighted Robinhood CEO Vladimir Tenev’s innovative approach, which he believes sets the company apart from other brokerage firms. 

Tenev’s initiatives, such as offering margin trading and enhancements to individual retirement accounts (IRAs), are viewed as key factors in Robinhood’s potential for growth.

Why Jim Cramer is bullish on Robinhood

Cramer’s confidence in Robinhood’s stock stems from several factors. 

The company’s expansion into new financial products, including margin trading and an AI-driven investment advisor, demonstrates its commitment to meet evolving market demands. 

Although Cramer expressed some reservations about the AI assistant, he acknowledged its appeal to the company’s user base.

Additionally, Wall Street analysts share Cramer’s enthusiasm. 

The average price target for Robinhood’s stock is $23, suggesting a potential upside of approximately 35% from its current level. 

However, it is worth noting that Robinhood’s lack of dividend payments makes it less attractive to income-focused investors.

Robinhood’s growing subscriber base 

Robinhood’s recent growth is also evident in its subscription service. 

The company reported over 2 million Gold subscribers, marking a substantial 61% increase year-over-year. 

This growth underscores Robinhood’s success in attracting and retaining customers, particularly among younger investors.

The firm’s diverse offerings, including a significant presence in the options and cryptocurrency markets, contribute to its strong market position. 

Cramer praised Robinhood for its ability to cater to various trading interests, noting the platform’s appeal to both casual and active traders.

Leadership changes and strategic moves

Robinhood’s strategic initiatives are further supported by recent leadership changes. 

The company recently appointed David Schwed as the Chief Information Security Officer for its brokerage division. 

Schwed brings extensive experience in cybersecurity, having previously served as COO at Halborn, a web3 and blockchain security solutions company based in Miami. 

This appointment is expected to bolster Robinhood’s security measures and enhance user confidence.

As Robinhood continues to expand its product offerings and enhance its platform, it is well-positioned for future gains. 

Investors and analysts alike are closely watching the stock, with expectations of significant upside potential despite the lack of dividend yields.