Street Calls of the Week: Upgrades for Robonhood, CrowdStrike

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Investing.com -- Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.

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Robinhood

What happened? On Monday, Citi upgraded Robinhood Markets Inc (NASDAQ:HOOD) to Neutral with a $18 price target.

*TLDR: HOOD selloff on Friday unwarranted. Citi positive on management performance.

What’s the full story? Citi reported that Robinhood finished down 12% on Friday due to the potential impact of lower rates. However, the research team noted that the fundamental story has been improving recently, with healthy growth in deposits, margin balances, and options/equities trading. Following the stock’s pullback, Citi views current valuations as presenting a more balanced risk/reward level.

The company is set to report its second-quarter earnings on Wednesday, August 7th, where the research team expects to receive positive updates on growth initiatives, including the UK expansion and the Gold card. Citi anticipates an overall positive update on the fundamental outlook for Robinhood

Neutral at Citi means “For stocks rated Neutral (2), if an analyst believes that there are insufficient valuation drivers and/or investment catalysts to derive a positive or negative investment view.”

CrowdStrike Holdings

What happened? On Tuesday, Piper Sandler upgraded CrowdStrike Holdings Inc (NASDAQ:CRWD) to Overweight with a $290 price target.

*TLDR: Ramifications from outage to be short-lived with negligible costs.

What’s the full story? Piper’s recent downgrade of CrowdStrike in early July did not anticipate the global outage and its subsequent fallout. However, the research team has now upgraded the cybersecurity leader, aiming to evaluate its long-term strategic value. Historically, outages and breaches have had modest impacts on cyber business fundamentals, but the scale of the CRWD-caused outage is unprecedented. Despite the near-term focus on litigations, settlements, congressional testimony, and potential numbers cuts ahead of and during the second-quarter earnings, the analysts believe the ramifications of the event will likely be short-lived and at negligible cost.

With shares down sharply for the month, Piper believes investors should opportunistically build positions at current levels. The research team maintains that the long-term strategic value of CrowdStrike remains intact, and the current situation presents a favorable risk/reward opportunity for investors.

Overweight at Piper Sandler means “Anticipated to outperform relative to the median of the group of stocks covered by the analyst.”