1 Cathie Wood Fintech Stock to Buy Right Now Before It Surges 110%, According to 1 Wall Street Analyst (Hint: It's Not SoFi)

Source The Motley Fool

Cathie Wood serves as chief executive officer and chief investment officer of Ark Investment Management. While her reputation is largely linked to her early bullish calls on Tesla and Bitcoin, her exchange-traded funds (ETFs) reveal a new area of interest: fintech.

Instead of investing in traditional bank stocks, Wood appears more interested in the intersection of financial services and technology. Some core fintech positions for Ark include Coinbase and SoFi.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

However, through a combination of savvy buys and price appreciation, Robinhood (NASDAQ: HOOD) has catapulted within Ark's portfolio, becoming the sixth-largest position across all her ETFs. And yet, even with Robinhood shares rocketing about 200% in 2024, analysts at Bernstein still see 110% upside (as of Feb. 24).

Let's assess why Robinhood had such a terrific 2024 and explore how the company is building a strong foundation to support sustained long-term growth.

Robinhood had a fantastic 2024, and...

Financial institutions tend to offer a combination of overlapping products, making it daunting for consumers to choose which platform best suits their specific needs. Robinhood is a relatively new entrant in the financial services industry, so the company has spent considerable time and capital figuring out ways to differentiate itself from legacy banks or brokerage firms.

Some useful metrics to look at to help determine whether Robinhood's investments are paying off include user growth, net deposits, and assets under custody. The table below summarizes these key performance indicators (KPI) from the company's fourth-quarter and full-year 2024 earnings report:

Category Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 January 2025
Funded customers 23.4 million 23.9 million 24.2 million 24.3 million 25.2 million 25.5 million
Assets under custody (AUC) $103 billion $130 billion $140 billion $152 billion $193 billion $204 billion
Net deposits $4.6 billion $11.2 billion $13.2 billion $10.0 billion $16.1 billion $5.6 billion

Data source: Investor Relations.

What's most impressive from the figures above is that assets under custody (AUC) almost doubled, and net deposits are on a trajectory to rise more than threefold in just one year. Robinhood's annual percentage yield (APY) and competitive matches for retirement accounts have helped lure customers onto the platform.

However, I think the company has more meaningful assets that have yet to bear fruit -- and I suspect the company's growth is just getting started.

A trader buying stock on their phone.

Image Source: Getty Images.

...The company is building a roadmap for long-term success

During the past few years, Robinhood has made a flurry of acquisitions. While many of these deals came with hefty price tags, they've also helped investors get a glimpse into management's vision for what Robinhood could really become down the road.

In June 2023, Robinhood acquired a credit-card startup called X1. Not long after, the company announced the launch of its own credit card, Robinhood Gold. Since its debut about a year ago, Robinhood Gold has amassed 2.6 million subscribers (nearly 10% of the company's funded customer base).

In addition, Robinhood announced two large acquisitions last year. In June, the company said it was acquiring Bitstamp in an effort to push further into crypto investing. Of note, the Bitstamp deal is expected to close during the first half of this year, pending regulatory approvals.

Then, in November, Robinhood shelled out roughly $300 million to acquire TradePMR, a move the company made to fast-track its entrance into wealth management. These deals are savvy moves, as Robinhood now has the opportunity to enter new pockets of the financial services realm while also cross-selling additional services (including Gold subscriptions) to new customers gained through the acquisitions.

Is Robinhood stock a buy right now?

As of this writing, Robinhood shares are hovering near their highest price-to-sales (P/S) levels in three years.

HOOD PS Ratio Chart

HOOD PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

Although this could suggest that Robinhood stock is getting pricey, I actually think the valuation expansion during the past year is warranted. The macroeconomy has shown signs of improvement, underscored by cooling inflation and tapering interest rates, so it's unsurprising that people have started investing more of their disposable income again.

To me, the rebound in Robinhood stock shown above actually makes sense. The shares have started to witness new life congruent with several consecutive quarters of robust growth across the top and bottom lines. Furthermore, given that the company is still integrating new platforms into its ecosystem, I think Robinhood is in the early stages of entering a new growth phase as it builds a broader financial services application.

In my eyes, Robinhood is a compelling buying opportunity right now for investors with a long-term time horizon.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $340,411!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $45,570!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $533,931!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 24, 2025

Adam Spatacco has positions in Coinbase Global, SoFi Technologies, and Tesla. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Tesla. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Ripple (XRP) Price Sees a Surge, Solana Targets $600 in 2025 as Investors Increase Focus on New AltcoinThe cryptocurrency market is showing renewed momentum as Ripple (XRP) experiences a significant price surge, and Solana (SOL) sets its sights on a bold $600 target by 2025. Meanwhile, a rising altcoin, Lightchain AI, is capturing investor attention with its innovative ecosystem and strong presale performance, making it a compelling choice for forward-looking investors. Ripple […]
Author  Cryptopolitan
Jan 15, Wed
The cryptocurrency market is showing renewed momentum as Ripple (XRP) experiences a significant price surge, and Solana (SOL) sets its sights on a bold $600 target by 2025. Meanwhile, a rising altcoin, Lightchain AI, is capturing investor attention with its innovative ecosystem and strong presale performance, making it a compelling choice for forward-looking investors. Ripple […]
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
May 08, Thu
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
placeholder
Ethereum Price Explodes Past $2,200 with 25% Surge—Momentum Builds FastEthereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
Author  NewsBTC
May 09, Fri
Ethereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
goTop
quote