Wolfe Research Starts Robinhood Markets (HOOD) at Peerperform, 'Do Not YOLO This Stock'

August 5, 2021 4:20 AM EDT
Get Alerts HOOD Hot Sheet
Price: $10.38 +11.85%

Rating Summary:
    7 Buy, 5 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 11 | Down: 19 | New: 11
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Wolfe Research analyst Steven Chubak initiates coverage on Robinhood Markets (NASDAQ: HOOD) with a Peerperform rating and a price target of $45.00.

The analyst comments "We are initiating coverage of Robinhood (ticker: HOOD) with a Peer Perform rating and $45 PT. Why Peer Perform? Despite our PT implying -36% downside to shares, we cannot in good faith recommend investors get involved in HOOD on either the long or short side. First, factors that make HOOD a tough short: 1) Potential for market to ascribe higher FinTech multiples to shares; 2) High “meme stock” risk with outsized retail involvement (evidenced by shares up +87% over the last two sessions); 3) Limited float post-IPO; and 4) Very high cost to borrow – all this suggests HOOD may not trade on fundamentals, with significant volatility risk near term (though at some point we believe fundamentals will prevail). Factors that make HOOD a difficult long: 1) Regulatory risk to PFOF (~75% of HOOD revenues) that is nearly impossible to handicap; and 2) Early signs of weakening retail activity / slowing account growth."

For an analyst ratings summary and ratings history on Robinhood Markets click here. For more ratings news on Robinhood Markets click here.

Shares of Robinhood Markets closed at $70.47 yesterday.

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