Read Why B of A Securities Gave Robinhood an Underperform Rating

By Benzinga
December 16, 2021 Updated: December 16, 2021

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.

By Anusuya Lahiri 

© 2021 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.