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Robinhood Markets shares fell by nearly 4% after Atlantic Equities analyst John Heagerty downgraded the rating of the stock and crypto trading app to underweight from Neutral.
Source: Seeking Alpha
HOOD down -3.67%, COIN up +3.20%
The analyst cut the company’s rating due to concerns about the rapidly declining number of users and the average revenue per user.
In a note, Heagerty stated that with customers returning to pre-pandemic behavioral trends and possible recession ahead, user engagement is declining further.
The analyst also indicated that the equity market plunges lead to reduced retail trading volumes and the regulatory threat to its pay-for-order-flow revenue is significant.
Heagerty further indicated that the falling crypto valuations would have a direct impact on both volumes and order value.
The analyst pares his revenue projection by 10% for 2022 and by 25% for 2023 and now expects negative adjusted EBITDA via 2025.
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