Robinhood initiated with a Market Perform at Raymond James

Raymond James analyst Patrick O’Shaughnessy initiated coverage of Robinhood (HOOD) with a Market Perform rating and no price target Robinhood has been a “massive disruptive force” in online brokerage since its founding in 2013 and its new account and deposit growth have been accelerating in recent quarters, the analyst tells investors in a research note. The firm says Robinhood continues to expand its suite of products and services “via an ambitious growth agenda.” However, despite all those positives, the stock’s current valuation requires one to underwrite sustainably high transaction volumes and/or limited downside to short-term interest rates, Raymond James contends. The firm is not comfortable forecasting those assumptions and notes Robinhood client trading activity has historically been volatile, particularly within crypto. The firm suspects the stock’s strength may persist in the short term due to expected “healthy” Q4 results, but does not like the risk/reward at this time.