Robinhood Not Going Away: Analysts Remain Bullish Long-Term With Lowered Price Targets Post Q1

Zinger Key Points
  • Rosenblatt analyst says “Robinhood is not going away” and suggests a strong future ahead.
  • KeyBanc analyst says product innovation is a key factor to an investment in Robinhood.

Financial services and stock brokerage Robinhood Markets HOOD reported quarterly earnings Thursday after market close. A revenue and EPS miss has led to several analysts lowering their price targets on the stock. Here’s what analysts had to say.

The Robinhood Analysts: JMP analyst Devin Ryan has a Market Outperform rating on Robinhood and lowers the price target from $41 to $36.

Rosenblatt analyst Sean Horgan has a Buy rating and lowers the price target from $15 to $12.

KeyBanc analyst Josh Beck has an Overweight rating and lowers the price target from $15 to $12.

Related Link: Robinhood Q1 Earnings Highlights: EPS And Revenue Miss, Monthly Active Users Fall, Company Remains Optimistic Of New Features

The Analyst Takeaways: Ryan called the recent quarter “another difficult quarter” for Robinhood. The analyst sees patience paying off for investors over the long run.

“In the first half of the last year, clearly the pendulum of retail engagement swung out positively far more than we would characterize as normal, and on the other hand, heading into the tail-end of last year through the beginning of this year, that pendulum has swung back through equilibrium to a more extreme negative position,” Ryan said.

Ryan noted that Robinhood is still in the early innings and has a strong long-term plan, with recent announcements bringing incremental revenue streams in the future. The analyst also notes that Robinhood has around $7 per share in cash, making the stock trade only $2 above its cash position.

In an updated note to clients, Horgan says “Robinhood is not going away” and suggests a strong future ahead.

“We now face the reality that HOOD is an extremely undervalued stock for those with long-term investment horizons,” Horgan said.

Horgan calls the current $10 share price a high-risk/high-reward investment opportunity.

Higher EBITDA could happen for Robinhood with a reduction in its workforce, Beck notes. The analyst also sees product innovation being a key to an investment in the company.

“Product innovation was a notable strength and leaves us positive on the Company’s ability to expand ARPU and keeps us Overweight,” Beck said.

Beck highlights new product launches of Robinhood Cash Card, extended trading hours, stock lending and the continued rollout of crypto wallets.

“The Company is taking a more cost disciplined approach to streamline recent rapid growth while also enabling further product and geographic progress.”

Price Action: Robinhood shares closed at $9.87 on Friday, versus a 52-week range of $9.00 to $85.00, according to Benzinga Pro.

Photo: Courtesy of Diverse Stock Photos on Flickr

Posted In: crypto walletsDevin RyanJMP SecuritiesJosh BeckKeyBancRosenblattSean Horganstock brokeragesAnalyst ColorPrice TargetReiterationAnalyst RatingsTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.