The company pioneered commission- and fee-free investing so that anyone who wanted to try investing for the first time could give it a shot.
It was unheard of at the time.
But these days, this company bleeds cash.
Today, I’m sharing the “High-Risk” stock Robinhood Markets Inc. (Nasdaq: HOOD).
With our Stock Power Ratings system, you can get to the heart of a company’s stock movement and financial picture to figure out if you should buy or sell.
A quick look helps you see the real picture of a company.
And Robinhood’s looks ugly.
HOOD Stock’s Roller-Coaster Journey
When Robinhood launched its initial public offering in 2021, HOOD stock rose 102.2% in a matter of days.
Since reaching that top in August 2021, HOOD has been in free fall.
The company offers a free stock-trading platform that allows users to trade stocks, cryptocurrencies and options.
Despite saving users money on trading fees, this company has yet to improve its own bottom line.
![hood stock rating](https://moneyandmarkets.s3.amazonaws.com/Article_Images/2022/10/spr.png)
HOOD’s Stock Power Ratings in October 2022.
HOOD stock scores a “High-Risk” 0 out of 100 on our Stock Power Ratings system, and we expect it to underperform the broader market over the next 12 months.
HOOD Stock: No Momentum + Very Low Value and Quality
I usually tell you exciting figures about impressive company performance.
That’s not the case for HOOD:
- In its recent quarterly report, the company recorded a 6% loss in total net revenue from the same quarter a year ago!
- Its total net loss for the quarter was $295 million.
That is why HOOD scores a 27 on growth.
It also scores in the red on our other five metrics.
HOOD has negative price-to-earnings and price-to-sales ratios, meaning it’s not making money. It scores a 5 on value.
The company has a horrible return on equity of negative 96.5% and a return on investment of negative 29%, earning it a 3 on quality.
The company bleeds cash, and it’s considerably overpriced compared to its peers.
![hood stock chart](https://moneyandmarkets.s3.amazonaws.com/Article_Images/2022/10/stock-chart.png)
Created in October 2022.
It’s been a rough 12 months for HOOD. The stock has fallen 76%.
That’s almost four times lower than its investment services sector peers.
Robinhood stock scores an atrocious 0 overall on our proprietary Stock Power Ratings system.
That means we consider it “High-Risk” and expect it to underperform the broader market.
Its revenue is slumping.
Its net margins are in the red by double digits.
And a quick look at our Stock Power Ratings system shows that despite being a trading services trailblazer, HOOD is a Stock to Avoid.
Stay Tuned: Top Agriculture Stock
Tomorrow, we’re returning to our original Stock Power Daily format.
Stay tuned — I’ll share all the details on a nitrogen fertilizer producer that’s crushing its peers by 10 times!
Safe trading,
Matt Clark, CMSA®
Research Analyst, Money & Markets
P.S. I’d love to hear what you thought about my “Stock to Avoid” article today. Was it valuable? Would you like us to continue sharing “High-Risk” stocks on occasion, so you know what to stay away from?
Would you prefer that we only share “Bullish” and “Strong Bullish” stocks?