Rosenblatt called weakness "a buying opportunity," and Bernstein maintained a $160 target, saying prediction markets will drive the "next leg of growth."
- Robinhood shares fell over 4% on Wednesday, on pace for their lowest close in a month after several firms cut their price targets.
- Keefe Bruyette Said Robinhood missed earnings estimates mainly because of $67 million in unrealized losses tied to its venture fund.
- Goldman Sachs, Truist, Barclays, KeyBanc, and JPMorgan all lowered their targets, but Wells Fargo cut the most to $100 from $120.
Robinhood Markets Inc. (HOOD) shares fell on Wednesday, on track to hit near three-month lows, after a slew of price target cuts following the company's third-quarter results, though some firms said the pullback in the stock offered a "buying opportunity".
Several analysts took a less upbeat view of Robinhood stock. Keefe Bruyette said Robinhood missed earnings estimates mainly because of $67 million in unrealized losses tied to the de-consolidation of Robinhood Ventures Fund I, according to TheFly. Keefe also cut its price target for Robinhood stock to $105 from $115 and kept a ‘Market Perform’ rating.
Retail Turns Bullish On HOOD
On Stocktwits, retail sentiment around HOOD improved to the ‘extremely bullish’ from the ‘neutral’ zone over the past day. Chatter around it also improved to ‘extremely high’ from ‘normal’ level.
HOOD stock is down over 19% so far this year and lost over 37% in the last 12 months.
Wells Fargo Leads Target Cuts
Wells Fargo made the biggest cut to $100 from $120, saying lower take rates weighed on how much Robinhood earned from customer activity.
Truist lowered the stock’s target to $125 from $134 on weaker equity, options and crypto volumes. Goldman Sachs reduced its target to $128 from $145 and said it expected a "mixed" response to the results.
Barclays also trimmed its target to $115 from $132, saying adjusted EBITDA beat estimates on lower spending, but the outlook was mixed.
KeyBanc cut its target to $135 from $140, saying strong volumes were offset by lower monetization.
Compass Point cut its target to $132 from $145, while JPMorgan cut its target to $114 from $115. JPMorgan said the core trading business was strong, but some moderation was seen during the quarter.
HOOD Stock Price Targets<
| Firm | New target | Old target | Rating |
| Goldman Sachs | $128 | $145 | Buy |
| Mizuho | $130 | $140 | Outperform |
| Truist | $125 | $134 | Buy |
| Barclays | $115 | $132 | Overweight |
| JPMorgan | $114 | $115 | Neutral |
| Keefe Bruyette | $105 | $115 | Market Perform |
| Wells Fargo | $100 | $120 | Equal Weight |
Rosenblatt Sees Buying Opportunity
Rosenblatt analyst Chris Brendler called the third quarter "a touch disappointing, but only relative to its success-driven high bar." He said Robinhood made "impressive progress on multiple growth initiatives," with more still to come. He said any weakness tied to the results was "a buying opportunity" and kept a ‘Buy’ rating and a $135 target.
Bernstein kept an ‘Outperform’ rating and a $160 target, implying about 69% upside from Tuesday's close. "Prediction markets and new products [are likely] to drive [the] next leg of growth," analyst Gautam Chhugani said in a note to clients, according to a CNBC report. He said prediction market revenue rose sixfold from a year earlier in the third quarter.
Earlier in the day, Mizuho also reiterated its 'Outperform' rating and cut the stock’s price target to $130. The firm also saw the pullback in Robinhood stock as a buying opportunity.
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