(Robinhood) Shares of Robinhood slipped more than 4% on Friday in premarket after Goldman Sachs analyst William Nance gave a sell rating from neutral.
Nance cited the softening retail engagement levels, especially the low-end clients in the downgraded rating.
The Goldman strategist also said that Robinhood has a limited path to near-term profitability, with continued weaknesses in account growth also an issue.
Nance says that download data during the quarter means that user growth has remained low. He says an acceleration in user growth is the requirement for the shares to go higher.
The strategist says that Robinhood has been achieving milestones in crypto, but broader industry volume declines will offset the positive attribute.
Goldman has set Robinhood price target at $13, representing a 7.7% upside potential. The rest of Wall Street has a “hold” rating on the stock.
HOOD: NASDAQ is down -3.52% on premarket.
