Federal Reserve cuts interest rates by 50 basis points, benefiting Robinhood's stock rally

From Nasdaq
September 30, 2024 08:37:00 AM:

The Federal Reserve announced a jumbo 50 basis point cut in interest rates on Sept. 18. Robinhood Markets, Inc. earns massive revenues from interest income, with net interest revenues of $929 million in 2023 surging by 119%. Shares of HOOD have gained 4.1% since the Fed rate cut. The stock has skyrocketed 87.5% this year, outpacing industry peers. Robinhood has been broadening its product suite to align with customer needs and is expected to continue diversifying its business. The company acquired Pluto Capital Inc., an AI-powered investment research platform, in July. It plans to acquire Bitstamp, a global cryptocurrency exchange, for around $200 million. Robinhood launched its trading app in the U.K. in March and is contemplating offering cryptocurrency futures in the U.S. and Europe. The company announced plans to buy back up to $1 billion of its outstanding common stock. Despite ongoing regulatory challenges in the U.S., analysts are bullish about Robinhood’s prospects, with estimate revisions moving upward. The stock is still undervalued and presents an attractive buying opportunity. With positive sentiment among analysts and compelling valuation, betting on this Zacks Rank #1 (Strong Buy) stock now could be a wise investment move.

Read more at Nasdaq.: Will Interest Rate Cuts Hurt Robinhood and Halt HOOD Stock Rally?