Robinhood Markets Share Forecast February 2022 – Time to Buy HOOD?
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Shares of American financial services company Robinhood Markets (NASDAQ : HOOD) are in the green today, after closing at $15.18 as of 4th February (19:59 EST). After the company posted its fourth-quarter report on Jan. 27th, Robinhood shares plunged to an all-time low. While its revenue rose 14% year over year to reach $363 million, it still missed analysts’ estimates by approximately $15 million.
Robinhood Markets – Technical Analysis
The financial statement from Robinhood Markets indicated a market cap of $13.114 billion with total assets worth $19.769 billion. Revenue for 2021 was at $1.82 billion with a profit margin of -203.09% compared to $958.83 million in 2020. Robinhood Markets posted a net loss of $423 million, compared to a net profit of $13 million a year age. Management expects its revenue to decline because of a tough comparison against its “outsized revenue performance” in the prior quarter.
Oscillators such as Relative Strength Index (14)(48.17), Stochastic %K (14, 3, 3)(77.73), Commodity Channel Index (20)(58.66), Average Directional Index (14)(48.24) and Awesome Oscillator(−1.68) are neutral. Moving averages such as Exponential Moving Average (10)(14.07), Simple Moving Average (10)(13.51), Exponential Moving Average (20)(14.68) and Simple Moving Average (20)(14.23) are indicating a buy action.
68% of all retail investor accounts lose money when trading CFDs with this provider.
Recent Developments
Robinhood’s fourth-quarter report indicated its assets under custody (AUC), the number of net cumulative funded accounts and monthly active users (MAUs) grew by double digits on a year-over-year basis. However, the company’s average revenue per user (ARPU) plunged 39% year over year and dipped 1.5% to reach $64. Management cited lower interest earnings from its securities lending programs and lower trading volumes for equities and options for the decline. Analysts now expect the company’s revenue to increase by 24% to reach $2.26 billion for the full year. But these estimates can get reduced due to its downbeat guidance.
Both financial regulators and the IRS are tightening restrictions around cryptocurrencies. Cryptocurrency brokers like Robinhood Markets could be forced to report their customers’ trading activity to the IRS if the proposed new tax law comes into effect in 2023. Robinhood and other brokers currently cannot obtain adequate insurance to protect their customers’ cryptocurrency holdings due to current laws and regulations. Since holds up to $22 billion worth of tokens for its clients which can make them a target for regulators. Additionally Robinhood’s controversial payment for order flow (PFOF) revenue model is also under the scanner. Its smartphone application “gamified” features are said to encourage risk-taking. Any restrictions on this could adversely affect the company’s revenue.
Should You Buy HOOD Shares?
Currently, investors interested in Robinhood shares should know that the risks outweigh the prospects for growth. Its PFOF model is regulated or illegal in most developed economies outside the U.S. Its monthly active user count is unlikely to grow because it has already reached the peak in its local market. Robinhood still failed to achieve full-year profitability even with elevated trading activity in the markets during 2021. Investors now have valid concerns about the company’s ability to generate earnings because of the decline of its key financials.
Robinhood shares are currently experiencing slowing growth, lack of profits, and a high debt-to-equity ratio of 1.7. These three metrics make the share hazardous to own right now, especially with interest rates rising. Add to this, unresolved regulatory challenges and stiff competition from larger online brokerages and dedicated cryptocurrency exchanges and the future doesn’t look too bright. It might be a future takeover target by a bigger brokerage firm. Thus there aren’t enough compelling reasons for investors to add Robinhood shares to their portfolios.
Buy HOOD Stock at eToro from just $50 Now!
