By Sam Boughedda
Investing.com — Robinhood Markets Inc (NASDAQ:HOOD) fell over 3% Tuesday after it was downgraded by analysts at investment firm Atlantic Equities.
Atlantic downgraded the stock to neutral from overweight, with analyst John Heagerty saying that the previous rating was "predicated on rapid growth continuing and a gradual expansion of operating margins."
The analyst told investors in a research note that Robinhood saw an "abrupt cessation" of user growth in the third quarter, with guidance for the fourth quarter indicating that growth will be "dramatically lower" than the investment firm's original expectations.
In addition, Heagerty believes investment in new products is likely to lower the company's adjusted earnings growth, and the change in focus to crypto trading will increase revenue volatility.
As a result, Heagerty declared: "We have substantially lowered our revenue and EBITDA forecasts and our price target declines to $35."
HOOD shares closed Tuesday in negative territory at $33.87.