Shares of Robinhood Markets Inc (NASDAQ: HOOD) are now down more than 50% from their IPO price, but it’s not enough to make Piper Sandler’s Rich Repetto lose hope in the stock.
Repetto’s remarks on CNBC’s ‘Squawk Box’
According to Repetto, Robinhood is hands down the most disruptive company in finance that he has come across in his career. On CNBC’s “Squawk Box”, he said he still saw the California-based company as innovative.
They’re one of the most disruptive companies I’ve ever followed. They democratized finance they brought on the zero commission. They acquired millions of customers from word of mouth. So, I still look at them as very innovative.
The Piper Sandler expert is convinced HOOD will recover back to its IPO price. He rates the stock at “hold” with a price target of $38 that represents an about 75% upside from here.
What Robinhood has to do to turn green
Repetto still sees a focus on young retail investors as Robinhood’s edge over its competitors and says the financial services company has to focus on creating new sources of revenue for future growth.
They have to broaden their product offerings. Now they’re coming up with a crypto wallet that will be in beta testing in January. They have 1.6 million customers waiting. Then there’s other new products like full paid securities lending. So, they will continue to innovate.
Much of Robinhood’s revenue in the fiscal second quarter was based on the meme phenomenon related to Dogecoin. Naturally, therefore, its revenue took a massive hit in Q3 as it didn’t have a replacement for Doge trading, and that’s, as per Repetto, is what Robinhood has to focus on.
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