The online broker had a great run after its listing last year. The company ran out of steam as it grew less and less users. It could be a good idea to avoid the stock at this time. Please read on.
shutterstock.com - StockNews Over the past year, the price of the financial services platform has fallen by 74.3%. It hit a high of $47.84 in September of 2022.
Users can invest in stocks, exchange traded funds, options, gold, and cryptocurrencies. The company offers a number of learning and education solutions.
Growth stocks have been hard hit. High inflation and rising benchmark interest rates have made the market uncertain. Hood didn't beat its estimates in the last quarter.
HOOD had a loss per share of $0.34 compared to the consensus estimate of a loss of $0.47. Revenue missed estimates in the last quarter. HOOD laid off 23% of its employees last month to save money.
HOOD's monthly active users decreased by over a million in the last quarter. The MAU has fallen from its high of 21.30 million.
The company's assets under custody have been affected by the market conditions. HOOD's AUC has fallen by a third over the course of a year. The average revenue per user has fallen over the last year. Its transaction-based revenues have fallen over the course of the year.
There are things that could affect HOOD's performance in the future.
The financials are weak.
Net revenues for the second quarter were $318 million, a decline of 43.7% from the same period a year ago. It spent $610 million on operating expenses, an increase of 21.7% from a year ago. The company had a net loss of $295 million, down from the previous year. Its loss per share was reduced by 84.2% from a year ago.
The analyst estimates are unfavorable.
HOOD's earnings per share are expected to remain negative. Its revenue is expected to fall by 24.8% in the fiscal year that begins in June.
The valuation is stretched.
HOOD's forward P/B is 12.6% higher than the industry average. Its forward P/S is higher than the industry average.
The profitability was weak.
The trailing-12-month ROCE for Hood is negative. Its asset turnover ratio is lower than the industry average. The net income margin is negative.
POWR ratings reflect bad news.
HOOD has a strong sell rating in our POWR Ratings system. POWR Ratings are calculated by considering 118 different factors.
Each stock is evaluated based on eight different categories. Hood has a D grade for value.
It has an F grade for quality. Its D grade for Sentiment is justified by analyst estimates.
HOOD is a stock in the software application industry. You can access HOOD's ratings for growth, stability, and sentiment by clicking here.
The bottom line.
Since the beginning of the year, HOOD has lost more than 40% of its value and it's difficult to get going. Its Monthly Active Users, Assets Under Custody, and Average Revenue per User are all down from a year ago.
The uncertain macroeconomic environment has caused investors to pull money out of the market HOOD has suffered due to the decline in the price ofCryptocurrencies, such asbitcoin andEthereum. HOOD is under pressure with experts expecting a longer winter.
The stock market is expected to be under pressure. HOOD's business is under stress. It could be a good idea to avoid the stock given its weak financials, unfavorable analyst estimates, and stretched valuation.
How does the company stack up against its peers?
HOOD has a strong sell rating. Commvault Systems, Inc., IBEX LIMITED, and Open Text Corporation all have A (strong buy) or B (buy) ratings.
Hood was trading at $11.13 per share on Monday morning, up $0.53 from the previous day. HOOD has declined since the beginning of the year, while the S&P 500 has risen.
Dipanjan was interested in the stock market as a child. He obtained a masters degree in finance and accounting. Dipanjan is interested in reading and analyzing emerging trends in financial markets.
There is more.
The post was first published on Stock News.com.
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