Robinhood’s (HOOD) commission-free trading platform has gained significant popularity. However, the company’s stock plunged to its 52-week price low of $21.50 in its last trading session. Deutsche Bank (DE:DBKGn) analyst Brian Bedell attributes the meme stock craze earlier this year with having fostered overestimated growth expectations for the company. So, given the stock’s lofty valuation, is HOOD an ideal investment now? Let’s discuss.Financial services company Robinhood Markets , Inc. (NASDAQ:HOOD), which is headquartered in Menlo Park, Calif., is known for pioneering commission-free trades of stocks, exchange-traded funds, and cryptocurrencies via a mobile app. HOOD’s stock declined in its public market debut on July 29, closing more than 8% lower at $34.82 per share. HOOD shares have slumped 41.8% in price over the past month and 22.8% over the past five days to close the last trading session at $21.55. HOOD declined more than 10% in its last trading session and hit its 52-week low of $21.50. The stock is now trading well below its 50-day and 200-day moving averages.
In November, the popular stock trading app disclosed that it had suffered a data breach involving approximately 7 million customers. The stock’s price plunged following the news.
For the third quarter, ended September 30, HOOD’s total net revenue came in at $364.92 million, missing the consensus estimate of $437.55 million by 16.6%, as cryptocurrency trading diminished. The company cited seasonal challenges and lowered retail trading activity as factors that impacted its third-quarter results and anticipated these headwinds to persist in the current quarter. Its average revenues per user (ARPU) decreased 36% year-over-year to $65, while crypto activity declined from record highs in the prior quarter in HOOD’s last reported quarter. The company also reported sequential declines in new funded accounts and net cumulative funded accounts in the third quarter of 2021. HOOD expects to generate fourth-quarter revenues no greater than $325 million and full-year revenue of less than $1.8 billion.