Analysts have mixed opinions on Robinhood Markets Inc.
B of A Securities analyst Craig Siegenthaler initiated coverage with an Underperform and a price target of $22, implying a 12.8 percent upside.
Siegenthaler assumed coverage in a note partially titled “The perfect storm is over.”
While he forecasts strong growth, he thinks the current valuation may be underappreciating factors.
The factors include the reversal of the COVID-19 related tailwinds, an overstated growth trajectory in 2020-21 due to the “meme” stock phenomenon, regulatory risks related to payment for order flow, and its already high market share in its unbrokered addressable market.
Robinhood is creating a modern financial services platform. It designs its products and services and delivers them through a single, app-based cloud platform supported by proprietary technology.
JPMorgan analyst Kenneth Worthington lowered the price target to $17 from $26, implying a 12.8 percent downside, and reiterated Overweight.
Worthington notes that with the selling pressure “seemingly from insiders / pre-IPO owners rather than short-sellers,” and with a stock still considered “hard-to-borrow,” he still sees a downside to the stock.
Worthington slashed the price target to reflect the risks to the average life of a Robinhood account and the outlook for revenue per user.
