Stock Analysis & Ideas

What Does TipRanks’ Website Traffic Tool Tell About Recently Listed Robinhood?

Story Highlights

Following its IPO in 2021, Robinhood has been able to expand its products and features, and enter new markets. However, TipRanks’ Website Traffic Tool indicates that the company may struggle in the upcoming quarter due to its falling website visits.

Robinhood Markets, Inc. (HOOD) provides a commission-free platform for the trading of stocks, exchange-traded funds and cryptocurrencies through a mobile app, and cash management services to users in the U.S. and the U.K.

The company, which was founded in 2013, got listed on the NASDAQ in July 2021 at a per-share price of $38, raising nearly $2 billion. Since then, its stock has declined 70.2%.

Recent Developments

Robinhood started offering cryptocurrencies in 2018. It now allows trading of about 11 currencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Dogecoin. The recent additions include Compound, Polygon, Solana, and Shiba Inu.

Last month, the company agreed to acquire Ziglu, a U.K.-based electronic money institution and crypto-asset firm, to boost its presence in the U.K. and Europe.

Due to the increased crypto trading demand in 2020 and the first half of 2021, Robinhood increased its employee base from 700 at the end of 2019 to nearly 3,900 as of March 31, 2022. However, with changes in customer preference over time and to curtail expenses, the company announced plans to slash its headcount by 9%.

Further, to expand its offerings, Robinhood has added a new stock lending feature that helps users to lend fully paid stocks to borrowers.

In its recent first-quarter results, Robinhood reported a 10% year-over-year drop in monthly active users (MAU), due to lower trading frenzy and volatility. Further, its total revenues tanked 43% to $299 million.

Wall Street’s Take

Last month, Morgan Stanley analyst Michael Cyprys maintained a Hold rating on Robinhood but lowered the price target to $14 from $15. The new price target implies 36.45% upside potential from current levels.

Also, Mizuho Securities analyst Dan Dolev maintained a Buy rating on the stock and lowered the price target to $14, implying 36.92% upside potential from current levels.

Overall, based on four Buys, five Holds and three Sells, the stock has a Hold consensus rating on TipRanks. Robinhood’s average price target of $13.66 implies upside potential of 31.6% to current levels.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into HOOD’s performance.

According to the tool, robinhood.com recorded a 62.7% monthly decline in global visits in April, compared to the previous year. Further, the footfall on the company’s website has fallen 57.2% so far this year against the same period last year.

This data indicates that the company’s performance in the upcoming quarter could be disappointing.

Closing Note

Given the prevailing economic uncertainties, investors are currently shying away from riskier assets. This is evident from the decline in the company’s monthly active users in the first three months of 2022.

Even though the company has been making several efforts to attract new customers, it will be wise to observe how Robinhood performs in the upcoming quarters.

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