Robinhood Inventory Falls After Goldman Sachs Downgrade to Promote on Earnings Danger, Fading Retail Engagement By Investing.com

Shares of Robinhood Markets (NASDAQ:) are down virtually 3% in pre-open Friday after Goldman Sachs analyst Will Nance downgraded to Promote from Impartial.

The analyst sees the present Avenue estimates as too excessive, together with a excessive bar for HOOD to succeed in profitability in 2023 (requires 10+% natural income development + macro tailwinds) as the corporate has famous.

One other key issue behind a downgrade name is the fading retail engagement, particularly among the many dealer’s decrease finish clients. Moreover, the continued weak spot in account development can also be listed as a headwind.

We imagine this lack of readability across the path to profitability will forestall the inventory from re-rating larger, Nance stated in a consumer word.

For Nance to turn into extra constructive on Robinhood, he lists three issues he’s searching for:

1) An inflection in person development, which we view as crucial for the corporate to proceed to scale its platform;

2) A clearer path to near-term profitability, and

3) A extra conservative Avenue outlook for income development.

Nance is 10%/18% beneath 2022/2023 consensus on income.

The brand new worth goal on HOOD shares is $13.00, down from $15.00.

The analyst additionally downgraded AvidXchange (NASDAQ:) to Impartial from Purchase.

By Senad Karaahmetovic