Robinhood Markets (HOOD) received an upgrade from Wolfe Research from Peer Perform to Outperform with a price target of $29 per share. The firm cited the company's strong fundamentals as helping it achieve growth.
Wolfe Research managing director Steven Chubak joins Market Domination to give insight into the firm's upgrade and how he believes the stock will perform moving forward.
Chubak outlines the growth levers that Wall Street is missing: "I think the most important component is actually expenses. So there is a tendency to focus on a lot of the brokerage metrics. But what's really going to drive the earnings growth from here is the fact that they have a highly leverageable expense base, where our expectation is that 90% of their expenses are fixed. They are going to see 75% incremental margins...It's that operating leverage that people are not adequately reflecting in numbers and that's really the biggest source of upside," Chubak tells Yahoo Finance.
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