Business & Investment

Robinhood shares reach the “floor” and bounce sharply, as analysts have lowered their price targets but still see “a lot of excitement”.

Robinhood Markets’ share price hit a record low on Friday as some analysts saw the trading app’s fourth-quarter results temporarily turning negative and becoming a “notable positive.”

+ 8.14%

It fell by 14.4% to a daytime low of $ 9.94 before reversing the course to rise 8.5% in the afternoon trading. What can help facilitate bounces A federal judge in Florida filed a negligent proceeding About the handling of last year’s “meme stock” trading frenzy.

Do not miss it: Opinion: Robin Hood does not celebrate a very unfortunate anniversary..

Despite the bounce, the stock, which went public six months ago, closed at record lows 10 times in January and was still trading about 67% below that. Initial public offering price of $ 38..

On the other hand, as of mid-January, short-selling of stocks, that is, the bet that stocks will fall, doubled in two months to 38.8 million shares, and the short-selling ratio of stocks rose to 10.36%. did. This is compared to the percentage of “Meme Stock” GameStop Inc.
+ 3.14%

14.89% AMC Entertainment Holdings Co., Ltd...
+ 2.20%


FactSet, MarketWatch

The company reported late Thursday Three consecutive wins of mistakesSales were lower than expected, as the loss was wider than expected, trading volume declined, and sales guidance for the first quarter was significantly lower than Wall Street’s forecast.

More than eight of the 14 analysts surveyed by FactSet have covered Robin Hood and lowered their price targets. This means that the average target has dropped from $ 38.38 at the end of December to $ 22.31, but the new average target is almost double the current level.

There were five analysts who were still bullish on the stock and seven others who were neutral, but only two were bearish.

FactSet, MarketWatch

KeyBanc Capital’s Josh Beck was one of the bulls, having repeatedly overvalued since its IPO on Friday, but lowered its target price by 40% from $ 25 to $ 15.

Beck said he cut “meaningful” estimates given that “trading has slowed significantly in recent months as the growth / crypto / meme epidemic has diminished.”

However, he now feels that 2022 is “reduced risk”. Beck said he believes that if the stock price is $ 10, he believes that about 75% of the company’s value will be represented in cash, creating a “floor” of stock. As a result, “we see intrinsic value among very enthusiastic people. [20+-million] Beck said in a note to his clients that he was “user base” and “we encourage investors to open positions.”

Devin Ryan, an analyst at JMP Securities, the biggest Robin Hood bull on the street, has lowered his price target from $ 58 to $ 45, but the target still means more than triple the current level. ..

Ryan said the quarterly results are “ordinary” and “there is a lot of excitement.” He said Robin Hood’s confidence that he could further diversify his business beyond just trading offerings is actually moving higher from the results.

“The company states that’growth is on the wave’, and we say that brokerage firms have their own declines and trends, with higher profits being much higher and lowers being much higher. Believe it, but the size and breadth of the platform has grown significantly, and results will become more apparent in the coming quarters, “Ryan wrote.

Mizuho’s Dan Dreff said Friday’s weakness in stock prices was just a “kneeling reaction” to lower-than-expected numbers, ignoring some of the “notable positives” in the report. The target price was maintained at $ 20.

“In particular, we see early signs of MAU stabilization. [monthly active users], Where the rate of decline seems to be declining, “Dolev wrote. “Furthermore, ARPU [average revenue per user] It was surprisingly stable and hadn’t changed much compared to the 3Q levels. “

Meanwhile, Deutsche Bank’s Brian Bedel maintained the rating while lowering the target price from $ 15 to $ 12. He said the results brought “encouraging progress”, but showed that it would take more time to achieve sustainable profitability.

“”[W]We believe that sustainable profitability is still at least a year away, and investors will want to see concrete progress before returning to stock prices, “Bedel wrote. “Therefore, stock trading is widespread, close to current levels, and hold valuations are repeated.”

While the S & P 500 index is rising, stock prices have fallen 64.5% in the last three months.
+ 1.35%

It fell by 4.8%.

Robinhood shares reach the “floor” and bounce sharply, as analysts have lowered their price targets but still see “a lot of excitement”. Robinhood shares reach the “floor” and bounce sharply, as analysts have lowered their price targets but still see “a lot of excitement”.

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