Shares of Robinhood Markets (NASDAQ:HOOD) have been volatile since going public last month. However, is it wise to buy the stock now because the company reported solid revenue growth in its second-quarter results? Let’s find out.Zero-commission trade pioneer Robinhood Markets, Inc. (HOOD) had a disappointing stock market debut on July 29, 2021. However, after the IPO the stock rallied to hit its all-time price high of $85 on August 4, due partly to retail investors’ interest and Cathie Wood’s investment in it. However, the stock has declined 34.1% in price since hitting its all-time high, to close yesterday’s trading session at $45.29.
HOOD’s second-quarter revenue soared due primarily to increased cryptocurrency trading. However, with the Federal Reserve inching closer to tapering its asset purchases, investors might rotate away from riskier assets, such as cryptocurrency.
Furthermore, HOOD’s management said, regarding the third quarter, that “we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts than in the prior quarter.” So, HOOD’s near-term prospects look bleak.