Should you buy Robinhood stock for $100 in 2024?

with respect to Robinhood Markets (NASDAQ resonance code: HOOD)The year 2024 is a dreamy beginning. The As of this writing, the company's stock price is up 46% this year. 2023's fourth-quarter financials were undoubtedly well-received by the market, fueling the increase.

Investors are interested in this booming market. fintech stocks(used form a nominal expression)The heat seems to be on. But it's still 74% below its August 2021 high. But it's still 74% below its highest price set in August 2021.If you're considering buying this stock, let's take a look at Robinhood's positives and negatives before making an informed decision.

Strong innovation with favorable factors.

Founded in 2013, Robinhood Allow investors to trade stocks with zero commissions and zero shares, thusIt's a complete reversal. History Industry. This triggered competitors to follow this free strategy, and it can be said that it truly democratized access to the stock market for ordinary people.

This is the most compelling reason for me to be bullish on Robinhood: the company has a strong innovation pipeline. The company is slowly transforming itself into a full-fledged financial services company for its customers.

The flagship brokerage platform also facilitates cryptocurrency trading. In addition, Robinhood offers retirement accounts, debit and credit cards, and attractive deposit yields. A mobile-first, technology-enabled approach creates better user experience.

I'd also like to mention the company's Gold Subscription Service, whose membership grew by 25% in the fourth quarter. for $5 a month, users get access to add-ons such as higher savings rates, IRA matching, instant deposits, and stock research services.

Koon's key growth strategy is to continue to roll out new features to delight existing customers and increase deposit inflow and usage while attracting new users. Expanding into international markets is another growth pillar.

A long list of bearish reasons

Innovation may be Robinhood's strength, but I think there are a lot of reasons to be down on the company right now. These factors will certainly make investors think twice about buying this stock.

Standard & Poor's 500indices respond in singing Nasdaq Resonanceindices In 2023, the performance was excellent, up 24% and 43%, respectively, but Robinhood's trading revenue fell by 4%, which I expect to grow rapidly in a soaring bull market.

More worryingly, the company's monthly active user base fell by 4% in the fourth quarter year-over-year, and again, where investor enthusiasm is high, as it has been since the start of 2023, you'd think Robinhood would bring in more users.

For the full year 2023, Robinhood's sales grew by $37% to $1.9B. However, it is worth noting that 50% of that revenue came from interest income.

The company Assets and liabilitiesCash and cash equivalents and funds from customers amounted to US$9.3 billion. The following is a list of all the products and services that are available to the public. Earn interest. Robinhood has benefited greatly from the Fed's aggressive rate hikes over the past few years. But it's not the company's core business, and it's not sustainable, especially if we start seeing interest rates fall in the near future.

Another bear argument is that Robinhood is not consistently profitable. To be fair, Robinhood did have positive net income in the second and fourth quarters of last year. And the company's leadership is committed to cutting costs.

However, I think this adds a lot of risk to the investment theory. If it wasn't for the large amount of interest income earned, Robinhood would still be in the red.

Although Koon's share price is significantly below its all-time high, the stock is highly valued. Investors can buy the stock at a price-to-sales ratio of 8.9. In my view, this price is an overly optimistic view of the company's future, which is another reason why we are not buying Robinhood.

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Neil Patel and his clients do not own any of the shares listed above.The Motley Fool does not own any of the shares listed above.The Motley Fool has a disclosure policy.

Should You Buy Robinhood Stock for $100 in 2024? This post was originally published by The Motley Fool.