Axios Pro Exclusive Content

Goldman Sachs airs caution on Robinhood, Silvergate, and Coinbase

Lucinda Shen
Apr 11, 2022
Illustration of the Robinhood app logo being pierced by arrows
Illustration: Sarah Grillo/Axios

Banking giant Goldman Sachs cut its recommendation on stock brokerage Robinhood (Nasdaq: HOOD) from neutral to sell on Friday.

Why its the BFD: Analysts rarely dish out sells, and when it happens, it usually sparks a variety of chatter around the company's growth, vulnerabilities, strategic plans, etc.

  • Even bigger — on the BFD status of this move — is that the slash came from Goldman, which was lead-left bookrunner on Robinhood's IPO last year. The shop that brought it public just dished out a 'sell' rating.

Driving the news: Analysts led by Will Nance say Robinhood is facing lower retail interest but is also unlikely to become profitable in 2023.

  • The bank is also expecting the slowdown in crypto trading volumes to impact the company, Coinbase, and Silvergate.

Bottom line: Robinhood needs to show either faster user growth with new products, or lay out a stronger path to profitability.

Go deeper