This month, we saw the Robinhood Markets, Inc. (NASDAQ:HOOD) up an impressive 31%. But that is meagre solace when you consider how the price has plummeted over the last year. To wit, the stock has dropped 77% over the last year. Arguably, the recent bounce is to be expected after such a bad drop. Only time will tell if the company can sustain the turnaround.
While the stock has risen 3.1% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
Robinhood Markets wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Robinhood Markets' revenue didn't grow at all in the last year. In fact, it fell 20%. That's not what investors generally want to see. The share price fall of 77% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Robinhood Markets is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Robinhood Markets shareholders are down 77% for the year, even worse than the market loss of 8.3%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 9.4% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Robinhood Markets better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Robinhood Markets you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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