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- Robin Hood Market (NASDAQ:Hood) in stock up 4.9% In premarket trading Friday, BofA Securities upgraded the stock and cryptocurrency trading app to “buy” from “underperform,” a rare double upgrade.
- “We believe that the current entry point is Contrary to 2021, when we initiated the rating as Underperform post-IPO as: (1) retail participation increased and accelerated organic growth; (2) operating leverage turned positive following significant expense reductions; (3) EBITDA /EPS post-growth valuation is attractive,” analyst Craig Siegenthaler wrote in a note to clients.
- He raised his price target on HOOD to $24 from $14. He noted that Bank of America now operates on a 15x EBITDA multiple, which is near the low end of the trading ranges of Interactive Brokers (IBKR) and Charles Schwab (SCHW) due to improvements in operating efficiencies, organic cost reductions and product offerings.
- While regulators may take action against Robinhood (HOOD) over its cryptocurrency practices, the company’s conservative cryptocurrency offerings lead Siegenthaler to be less concerned about the potential outcomes.
- Bank of America’s Buy rating on HOOD contrasts with the SA Quant Rating and the Wall Street average rating (both Hold), and is in line with the average SA analysts’ Buy rating.
