• Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
Stock

Why Robinhood stock isn’t worth buying despite S&P 500 inclusion

by September 8, 2025
by September 8, 2025

Robinhood Markets Inc (NASDAQ: HOOD) has pushed higher in recent sessions following news that it will replace Caesars Entertainment on the benchmark S&P 500 index on September 22nd.

Investors are cheering HOOD shares primarily because index inclusion triggers automatic buying from passive funds – resulting in a notable increase in demand that often leads to stock price gains.

Evidently, index inclusion marks a major milestone for the retail brokerage that once symbolized pandemic-era trading mania.

Still, investors are recommended treading with caution on Robinhood stock for several reasons. A few of them are discussed below.

Robinhood stock is already priced to perfection

HOOD shares https://invezz.com/reviews/robinhood/ remain unattractive despite index inclusion mostly because of valuation concerns. The fintech stock is currently going for a forward price-to-earnings (P/E) ratio of about 66 – which is well above the industry average.

In fact, it even trumps the multiple on some of the top AI stocks, including Nvidia, that’s going for 41 only at the time of writing. This suggests Robinhood shares are priced to near-perfection in the second half of 2025. 

Its premium valuation reflects aggressive assumptions about future growth, margin expansion, and crypto resurgence.

While index inclusion often proves a meaningful catalyst for a stock – investors should note that HOOD shares are already up some 150% versus their April low, indicating much of the optimism is already baked into them at current levels.

Passive fund inflows from S&P 500 inclusion may offer short-term support, but they don’t change the underlying math. At current levels, Robinhood leaves little room for error – and even less for upside surprise.

Why else are HOOD shares not worth owning

Investors should practice caution in loading up on Robinhood shares at current levels also because the financial technology company’s business model remains vulnerable to regulatory scrutiny and product concentration.

Its recent lawsuit against Nevada and New Jersey regulators over event contracts underscores ongoing friction with state authorities.

Meanwhile, crypto trading, despite expansion and rapid growth, still makes up only one-fifth of HOOD’s overall business. Meanwhile, its options trading business faces regulatory headwinds and cyclical risk as well.

Unlike diversified brokerages, Robinhood’s reliance on a narrow set of products and a retail-heavy user base makes it susceptible to sudden shifts in sentiment or policy. Inclusion in the S&P 500 doesn’t insulate it from these structural fragilities.

Moreover, the financial services industry is broadly known for healthy dividend yields, but HOOD shares lack that appeal in the second half of this year as well.

Wall Street’s take on Robinhood shares

Investors should also note that Wall Street firms no longer see significant further upside in HOOD stock either.

At the time of writing, the consensus rating on Robinhood shares remain at “moderate buy”, but the mean target of about $115, according to Barchart, indicates potential upside of only 6.0% from here.

In short, while passive fund flows following S&P 500 inclusion is often a tailwind – long-term investors should be wary of chasing the momentum.

The post Why Robinhood stock isn’t worth buying despite S&P 500 inclusion appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Asian markets open: Nikkei rises as yen falls after Japan PM resigns; Sensex to open higher
next post
Here’s why the Circle stock price has plummeted

Related Posts

Cyberattack halts Asahi production, disrupts Japan’s beer supply

October 3, 2025

Europe markets open: Stoxx 600 rises 0.4%, extending...

October 3, 2025

Bitcoin ETFs see over $600M in inflows as...

October 3, 2025

Stockholm leads Europe in IPO activity with $6.8...

October 3, 2025

Indonesia suspends TikTok licence after data refusal during...

October 3, 2025

Why the Thai baht’s climb against US dollar...

October 3, 2025

OpenAI valuation hits $500 billion as employees sell...

October 2, 2025

Here’s why JPMorgan, Morningstar are bullish on Alibaba...

October 2, 2025

Europe markets open: Stoxx 600 jumps 0.6%, led...

October 2, 2025

Will the Tesco share price hit 500p as...

October 2, 2025

Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.

By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

Recent Posts

  • What I Saw in Milei’s Argentina

    October 3, 2025
  • Tariffs Rest on Distrust of Citizens

    October 3, 2025
  • Cyberattack halts Asahi production, disrupts Japan’s beer supply

    October 3, 2025
  • Europe markets open: Stoxx 600 rises 0.4%, extending its record-setting rally

    October 3, 2025
  • Bitcoin ETFs see over $600M in inflows as BTC price nears $120K

    October 3, 2025
  • Stockholm leads Europe in IPO activity with $6.8 billion raised

    October 3, 2025

Editors’ Picks

  • 1

    Meta executives eligible for 200% salary bonus under new pay structure

    February 21, 2025
  • 2

    Walmart earnings preview: What to expect before Thursday’s opening bell

    February 20, 2025
  • 3

    New FBI leader Kash Patel tapped to run ATF as acting director

    February 23, 2025
  • 4

    Cramer reveals a sub-sector of technology that can withstand Trump tariffs

    March 1, 2025
  • 5

    Anthropic’s newly released Claude 3.7 Sonnet can ‘think’ as long as the user wants before giving an answer

    February 25, 2025
  • 6

    Nvidia’s investment in SoundHound wasn’t all that significant after all

    March 1, 2025
  • 7

    Pop Mart reports 188% profit surge, plans aggressive global expansion

    March 26, 2025

Categories

  • Economy (2,770)
  • Editor's Pick (279)
  • Investing (185)
  • Stock (1,885)
  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions

Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Read alsox

Baidu, Alibaba lead Chinese tech rally to...

September 17, 2025

Skip Nvidia: these 3 stocks are set...

March 29, 2025

Oscar-winning No Other Land co-director Hamdan Ballal...

March 25, 2025