Barclays issued a note on Robinhood Markets (NASDAQ: HOOD) ahead of the company's scheduled February 10 earnings, drawing attention to several factors that could shape investor outcomes in the near term. The note highlights valuation oddities and three discrete risk areas that, taken together, underpin Barclays' cautious tone heading into the report.
On valuation, InvestingPro data referenced by Barclays shows a price-to-earnings ratio of 34.34 alongside a price/earnings-to-growth (PEG) ratio of 0.11. Those figures present a juxtaposition of a relatively high earnings multiple and an unusually low PEG, a combination that presents a mixed signal for investors evaluating both current earnings and growth expectations.
Market action in recent weeks has altered sentiment toward the stock. Barclays observed that sentiment has become "more positive as shares have sold off over the past several weeks," implying that the pullback has attracted renewed investor interest for some. Supporting that view, InvestingPro data cited in the note indicates Robinhood shares have fallen nearly 8% in the last week and more than 27% over the prior six months, and that technical indicators currently point to oversold conditions.
Barclays lays out three specific investor concerns:
- Retail engagement risk tied to crypto and AI-related market pressures - Barclays flagged the potential for weakening crypto sentiment and broader AI-driven pressures in equity markets to reduce retail trader activity on Robinhood's platform.
- Near-term P&L relevance of recent product launches - The bank noted Robinhood's expansion efforts, including European tokenized equities and new banking services, but cautioned these initiatives "may not be as meaningful from a near-term P&L perspective."
- Legal and regulatory uncertainty for prediction markets - Barclays pointed to ongoing state-level litigation affecting prediction markets, citing "a number of ongoing state-level suits" and "recent adverse outcomes for the prediction markets industry." The note also acknowledged, however, that Kalshi - Robinhood's principal exchange for prediction-market products - has exhibited strong volume growth.
Analysts from multiple firms have continued to publish views on Robinhood amid the stock's volatility. Truist Securities adjusted its price target to $130 while maintaining a Buy rating, citing concerns related to recent declines in cryptocurrency prices. The same report noted that Truist also reiterated a Buy rating with an original $155 price target amid a roughly 10% drop in shares.
Other brokerages retained constructive stances. Bernstein maintained an Outperform rating with a $160 target and highlighted a 21% year-to-date decline in the stock. Mizuho reaffirmed an Outperform rating and set a $172 price target, specifically noting Robinhood UK’s launch of a stocks and shares ISA with attractive incentives. Piper Sandler reiterated an Overweight rating and a $155 target despite a roughly 35% decline from the stock's prior peak. Collectively, these analyst actions reflect continued conviction among several firms even as the share price has come under pressure.
Investors will be watching the February 10 earnings release closely for clarity on user engagement trends, the revenue impact of recent product rollouts, and any developments related to prediction-market exposure. Barclays' note highlights how those elements, combined with market positioning and valuation metrics, could influence sentiment and performance through the near term.