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Robinhood 'is here to stay,' says analyst

Robinhood's (HOOD) move to trim staff brings the trading platform app "back to Earth" following a massive hiring spree last year, says one analyst.

"They went public at the most craziest, exuberant time for trading," Mizuho senior financial technology analyst Dan Dolev told Yahoo Finance Live.

"They definitely over-hired. They need to trim their employees," said Dolev. "It's very harsh but it doesn't say anything about the fundamental value proposition of the business."

The analyst currently has a Buy rating on the stock, with a $19 price target.

Robinhood's stock has been touching new 52-week lows recently as technology and fintech stocks have seen their valuations slashed amid an increasingly tighter monetary policy environment. Shares are down 47% year-to-date and about 86% off their all-time highs last year.

Even if Robinhood were to be acquired at such discounted valuations, Dolev says, "Robinhood is here to stay."

"Everyone we talk to, and I've talked to a lot of young people ... their interface is better than anyone else," he said.

"People that are on it, love it. The number of interactions per week, per month, is lightyears above all the other apps," Dolev.

The analyst says Robinhood's business is "very good, what they're suffering from is just this post-COVID hangover."

"They've really invented something that their peers, their more sleepy peers don't have. They have a following," he said. "It just happened to have gone public during the peak of the all-time trading group."

The Menlo Park, California-based company went public last July, with an IPO price of $38/share. It reached a 52-week high of $85/share last year.

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