Goldman Sachs airs caution on Robinhood, Silvergate, and Coinbase
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.