A good week for Robinhood Markets (NASDAQ:HOOD) shareholders doesn’t ease the pain of a year-long loss

Robinhood Markets, Inc. (NASDAQ:HOOD) Shareholders should be happy to see the stock price rise 30% over the past month. But that barely makes up for the shocking decline of the last twelve months. Specifically, the stock price plunged 78% during this period. Arguably, the recent rebound is to be expected after such a bad drop. Only time will tell if the company can sustain the turnaround.

On a more encouraging note, the company has added $467 million to its market capitalization in the last 7 days alone, so let’s see if we can work out what caused shareholders to lose a year.

See our latest analysis for Robinhood Markets

Robinhood Markets is currently not profitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. When a business is not making a profit, you generally expect to see good revenue growth. Indeed, rapid revenue growth can be easily extrapolated to predict profits, often of considerable size.

Robinhood Markets revenue has not increased at all over the past year. In fact, it dropped by 20%. This is generally not what investors want to see. The 78% drop in share price in one year tells the story. Holders must not lose the lesson: loss-making companies must increase their income. But the markets are overreacting, so there is an opportunity for investors who are willing to take the time to dig deeper and understand the business.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see exact values).

NasdaqGS: HOOD Earnings and Revenue Growth August 15, 2022

Robinhood Markets is well known to investors and many smart analysts have tried to predict future profit levels. Since we have quite a number of analyst forecasts, it might be worth checking this out. free chart illustrating consensus estimates.

A different perspective

Robinhood Markets shareholders are down 78% for the year, worse than the market’s loss of 8.9%. It’s disappointing, but it’s worth bearing in mind that selling market-wide wouldn’t have helped. Putting the past twelve months aside, it’s good to see that the stock price has rebounded 8.1% in the past ninety days. It could just be a bounce because the selling was too aggressive, but fingers crossed it’s the start of a new trend. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. To this end, you should be aware of the 3 warning signs we spotted with Robinhood Markets.

Sure Robinhood Markets may not be the best stocks to buy. So you might want to see this free collection of growth values.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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