There was an update on April 27, 2022, 03:07pm.
After the company laid off a chunk of its workforce, shares of stock trading app Robinhood lost 4% on Wednesday, hitting a new record low, with analysts warning that troubles could still be far from over with first-quarter earnings due on Thursday.
Analysts warn that the stock could take a further hit if revenue and user growth continue to be disappointing.
The investment platform's stock fell 4%, hitting a new record low of less than $9.60 per share, as the company's troubles continue to mount.
The drop in share price comes a day after Robinhood announced that it would lay off 9% of its full-time employees to slash costs and reduce roles.
The company's stock could take a hit after first-quarter earnings, which are due on Thursday, with analysts warning that the company is still struggling to keep users on its platform.
The stock trading app expects revenue to be less than $340 million for the quarter, which is down from a year ago, due to a slowdown in trading activity on its platform.
The majority of analysts on the stock maintain a hold rating, though several have recently lowered their ratings due to the gloomy revenue outlook.
The stock was given a "sell" rating by Goldman Sachs in April, warning of depressed user growth and a limited path to near term profitability.
The layoffs have beenmet with investor concern, especially regarding trends in the business and management's outlook for a rebound.
According to the CEO of the company, there is over $6 billion in cash on its balance sheet. The stock trading platform recently announced that it would acquire the U.K. based Ziglu in order to jump start its international expansion. The company said it is looking to expand into the U.K. and Europe.
The user growth on Robinhood was huge in 2020 as Americans started trading stocks. After the company went public at a $32 billion valuation, its stock price surged as much as 60% in a matter of days before falling back down to earth. Over the past year, trading activity and user growth has slowed, and the stock of the company has lost two thirds of its value since its IPO.
According to data from digital intelligence provider Similarweb, the average visit duration for Robinhood has decreased from 14 minutes in January to 9 minutes in March.
After a deal to buy a UK app, shares of Robinhood jumped 5%.
Goldman Warns investors should sell after the stock plunge.
Just one year after the stock mania, the shares of Robinhood have plummeted.
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