Caution on Robinhood Amid High Multiples and Potential Downside Risk

2 months ago

Host

"The issue is at some point in time this bull market will come to an end, right? At some point, we're going to have a whole rerating of the stock and you're going to have a nasty crash because here's the deal. Robin Hood trades right now at very high P ratios. So once the revenue growth all a sudden starts to collapse, right, the stock price is going to collapse twice as hard essentially and that'll not be a good thing obviously for Robin Hood stock price. And so I wouldn't feel comfortable stepping on Hood here."

The speaker offers a cautionary commentary on Robinhood, warning that its current high valuation may not be sustainable once the bull market ends. They highlight the risk of a sharp re-rating, potentially resulting in a drop of 50-80% over the next 12 months, advising investors to avoid buying at present levels.

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