Windsock Analysis for Robinhood ($HOOD), a member of the Fintech 50 Index
of publicly traded stocks.
Windsock Score is our qualitative and quantitive rating of companies in the
Fintech 50 Index.
Our qualitative Windsock analysis indicates what growth should be in future
based on our analysis of both headwinds and tailwinds. The quantitative
Windsock Revenue Momentum analysis from our Robot Equity Analyst
technology shows actual recent growth.
Both are available for Daily Fintech members for only $14.3 per month (or
$143 per year) together with our other content.
We start with Robinhood (Symbol = HOOD), which joined the Fintech 50 Index
of publicly traded stocks after their IPO on 29 July 2021.
The Windsock Qualitative Score combines score for a) the sub-Category within
Fintech 50 -the score is the same for all companies in that Category and b)
Positioning of that company within that Category.
HOOD does NOT score well – with a total Windsock Qualitative Score of (4). We
put HOOD into the Category of Capital Markets/Brokers and we assigned that
whole Category a score of (2), based on Brokers facing Headwinds from low
barriers to entry and regulatory pressures around offering free trades
monetised by selling order flow. We also gave HOOD a Positioning score of (2).
Their gameified user experience is easy to copy and other Brokers can easily
offer a brand that is free if regulators allow them to sell order flow.
So, if regulators DO allow Robinhood to sell order flow, they will face a lot of
competition. If regulators do NOT allow Robinhood to sell order flow, they will
face even more immediate danger.
Robinhood has a high valuation, so they cannot afford a mistake.
Our qualitative analysis could be wrong and Robinhood could grow revenues
fast enough to justify the high valuation. Investors should also look at the
quantitative Windsock Revenue Momentum analysis from our Robot Equity
Analyst technology shows actual recent growth. This Q-Q Revenue analysis is
an alternative to the three methods investors rely on today:
– Trailing Twelve Months (TTM).
– Analyst estimates of future growth.
– Comparison to same quarter the previous year.
The Revenue Momentum for = %, based on revenue for last quarters as follows:
Windsock Analysis appeals to long term investors who buy the thesis that
Fintech is a growth sector, but want to invest in companies that are both
positioned to and actually growing fast (rather than overhyped “growth stocks”
with too high valuations).
Daily Fintech’s original insight is made available to you for US$14.3 per month
(which equates to less than one dollar per day for caffeine for the mind that
could be worth $ millions)