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Robinhood shares rebound after falling 14%

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Robinhood shares rebound after falling 14%

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Baiju Bhatt and Vlad Tenev attend Robinhood Markets IPO Day on July 29, 2021 in New York City.

Cindy Ord | Getty Images

Robinhood recouped its steep losses on Friday as investors beat the company’s disappointing guidance and rallied on progress in new product development.

Shares of the stock trading app soared more than 2%, after falling 14.4% to $9.94 at their low for the day.

Weaknesses in Robinhood’s earnings report released Thursday after the bell were its first-quarter revenue forecast and its loss of monthly active users.

The new public brokerage firm forecasts revenue of less than $340 million for the first quarter, down 35% from 2021. Wall Street’s consensus estimate was $448.2 million in revenue for the first quarter. quarter, according to FactSet. Additionally, monthly active users fell to 17.3 million last quarter from 18.9 million in the third quarter. That number was also lower than estimates of 19.8 million, according to FactSet.

Major Wall Street firms retained their respective ratings on Robinhood after the results. However, several companies, including Goldman Sachs, JPMorgan and Piper Sandler, have slightly lowered their 12-month price targets for Robinhood. Barclays and Deutsche Bank also lowered their targets for the title.

Most analysts were disappointed with the Q1 forecast, but remained hopeful for the launch of the fully paid securities lending, crypto wallet and monetary tightening boost.

“Robinhood has been on a rough road recently, but we still see cause for celebration,” said JMP Securities analyst Devin Ryan. “We think investors buying the stock today must believe Robinhood can diversify its business beyond just a trading offering, but our confidence on that is actually higher outside of earnings.”

Shares of Robinhood are trading around $11 per share on Friday, well below its IPO price of $38 from July.

— with reporting from CNBC’s Michael Bloom.

Robinhood shares rebound after falling 14%

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