Stock Market Analysis Today – 7 Top Robinhood Stocks in 2021: Do the Pros Agree?
Robinhood has changed the way the investing game is played. The platform makes it easy for traders of any age and any income to get involved in investing, offering a wide variety of instruments, from stocks to cryptos, with zero commissions and trading costs.
What’s more, Robinhood’s zero-commissions model influenced other brokerage firms to revise their fees policies, which has benefitted the entire trading community as a whole.
With stories circling the Street of a few users generating massive returns almost overnight, including more recently by those following the WallStreetBets sub-Reddit in concentrated pushes, it’s no wonder investor attention is fixated on the app.
Despite the hype, Robinhood is not without its fair share of critics. The well-publicized suicide of a young and unsophisticated investor last year highlighted the risks and dangers of not ensuring that traders have the required knowledge and understanding of the instruments they are utilizing. Robinhood has been accused of “gamifying” investing and the State of Massachusetts is the latest authority to file a complaint against the app for its marketing tactics.
Nonetheless, Robinhood lists its most popular picks among users at any given time, including how many accounts are invested in each. We’ll look at the seven top Robinhood stocks, and run them through TipRanks’ database to see whether the pros on Wall Street agree with what’s favored among that crowd right now.
Data is as of Jan. 25.
Virgin Galactic
- Market value: $8.6 billion
- Robinhood popularity rank: 7
- TipRanks consensus price target: $33.00 (8% downside potential)
- TipRanks consensus rating: Moderate Buy
Virgin Galactic (SPCE, $36.00) has found itself making more headlines recently as billionaire rocketman, Richard Branson, gets closer to achieving his dream of taking tourists to the stars. Virgin Galactic will perform three final test flights, after which commercial flights with tickets priced around $250,000 will begin to take tourists into space.
According to Virgin Galactic, 600 potential space travelers have already bought tickets for this “out of this world” experience, including celebrities such as Leonardo DiCaprio and Justin Bieber.
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“Today, we have shown that Virgin Galactic really can open space to change the world for good,” Branson said following a test flight in December. “We will now push on with the remaining portion of our flight test program, which will see the rocket motor burn for longer and VSS Unity fly still faster and higher towards giving thousands of private astronauts an experience which provides a new, planetary perspective to our relationship with the Earth and the cosmos.”
Credit Suisse analyst Robert Spingarn joins Branson in his optimism that the test flights will be successful.
Spingarn rates the stock a Buy and recently bumped up his price target to $36 from $26. He sees the positive in a recent engine failure that forced Virgin Galactic to abort its test flight in December, telling investors, “the silver lining is that SPCE was able to prove that its built in fail-safe scenarios worked properly enabling SS2 to glide safely back to Earth without jeopardizing the safety of anyone on board. The successful triggering of fail-safe scenario should help quell some investor concerns over the risk of a catastrophic event as SPCE begins commercial operations.”
SPCE shares are already up more than 50% so far this year, largely helped by ARK Investment Management’s recent announcement that it is planning to launch a new space-focused ETF.
Most analysts on the Street remain cautiously optimistic, with the consensus rating on SPCE being a Moderate Buy. However, the downside potential illustrates that the stock has quickly overshot analysts’ price targets – so now, investors need to carefully watch the pros to see whether they continue to revise their price targets upward, or if they think Virgin Galactic has flown too high, too fast.
To see what other analysts think, see SPCE’s stock forecast on TipRanks.
Zynga
- Market value: $11.3 billion
- Robinhood popularity rank: 6
- TipRanks consensus price target: $12.38 (20% upside potential)
- TipRanks consensus rating: Strong Buy
Zynga (ZNGA, $10.32) has come a long way since releasing its first game, now known as Zynga Poker, on Facebook in 2007. Its meteoric rise was confirmed last year in July as it took over the No. 1 spot as the largest mobile video game company in the U.S. after acquiring Peak for $1.85 billion.
Wells Fargo analyst Brian Fitzgerald recently upgraded his rating on the stock to a Buy from Hold, citing Zynga CEO Frank Gibeau’s confirmation that the company’s multiyear strategy and detailed strategic vision led to record third-quarter revenues, bookings and operating cash flow metrics.
Fitzgerald told investors that the stock’s decline following the release of Zynga’s third quarter results was overdone and that the stock looks “inexpensive relative to growth.” He has reimagined what Zynga will look like in the future and he likes what he sees.
“We think ZNGA’s investment in supporting new launches (i.e. Harry Potter, Puzzles & Spells) is underappreciated by the market, and data on App usage have inflected back upwards in Nov and Dec after a lull in July through September,” Fitzgerald said in a note to clients, adding, “We think shares of Zynga present a favorable risk/reward.”
All seven of the analysts who have offered a rating on Zynga in the last three months believe it is a Buy, with further upside potential over the next 12 months. ZNGA shares have gained 57% in value over the past year. See what other analysts are saying on TipRanks.
Plug Power
- Market value: $31.3 billion
- Robinhood popularity rank: 5
- TipRanks consensus price target: $49.00 (25% downside potential)
- TipRanks consensus rating: Strong Buy
Plug Power (PLUG, $65.72) has started the year on the front foot and recently announced its second major partnership deal in the span of a week. The signing of a Memorandum of Understanding (MoU) with French auto manufacturer Renault, to launch a 50/50 joint venture by mid-2021, came just a few days after securing a $1.5 billion strategic investment from South Korea’s SK Group, to supply hydrogen fuel cell products to Asian markets.
In light of these recent events, H.C. Wainwright analyst Amit Dayal maintained his Buy rating on the stock and raised his price target to $85 from $60.
Dayal told investors in a research report that Plug’s recent evolution “cements the company’s position as the leading hydrogen and fuel cell play in the world,” adding, “We believe with partners such as SK Group and Renault, the company essentially has state-level backing to accelerate hydrogen and fuel cell commercialization in Asia and Europe.”
“We are projecting net revenues to rise to $16.7 billion in 2030 from $289.7 million in 2020, at a ten-year CAGR of 50%. We believe that the company should be able to widen its gross margins (excluding effect of warrants) from 12.4% in 2020 to 33.9% in 2030 as revenues rise,” Dayal says.
Shares of Plug Power have already risen 93% in value so far this year, and a staggering 1,590% over the past 12 months.
The consensus among analysts on the Street is a Strong Buy, with 10 buys and just one Hold; however, Plug’s impressive share price appreciation has given rise to conflicting opinions about a price target. According to the average price of analysts’ projections – at least at the moment – this Robinhood favorite has far outkicked its coverage and might hold some downside risk over the next 12 months.
If you’d like to see the variety of analysts’ price targets, check out the PLUG analysts page on TipRanks.
Microsoft
Microsoft building”/>- Market value: $1.7 trillion
- Robinhood popularity rank: 4
- TipRanks consensus price target: $253.30 (12% upside potential)
- TipRanks consensus rating: Strong Buy
Microsoft ((MSFT), $229.53) remains a favorite among traditional investors and Robinhood stockowners alike, and is considered one of the Big Five information technology companies in the U.S.
In recent years, Microsoft has increased its focus on cloud computing and created Azure, a service created to build, run, and manage applications through Microsoft data centers all over the world.
The prospect of a prolonged work-from-home dynamic has prompted companies to shift their digital transformation to cloud-based solutions.
Wedbush analyst Daniel Ives stated in a research report that Microsoft is the “core cloud name” to lead the transition. “We believe Azure’s cloud momentum is still in its early days of playing out within the company’s massive installed base and the Office 365 transition for both consumer/enterprise is providing growth tailwinds over the next few years,” he noted.
Ives is bullish on (MSFT) going forward and believes that 85% to 90% of potential cloud-based transitions have already been budgeted for and authorized by the senior management of most companies.
“While we have seen the momentum of this backdrop in the last few quarters, we believe deal flow looks strong heading into the rest of FY21 as we estimate that Microsoft is still only ~35% through penetrating its unparalleled installed base on the cloud transition,” Ives says.
He’s is not alone. Of the 24 analysts who offered ratings on (MSFT) over the past three months, every one of them rated the stock a Buy. For more analyst insights, take a look at TipRanks.
Amazon.com
Amazon.com trucks”/>- Market value: $1.7 trillion
- Robinhood popularity rank: 3
- TipRanks consensus price target: $3,831.32 (16% upside potential)
- TipRanks consensus rating: Strong Buy
The coronavirus pandemic fueled a change in consumer shopping habits in 2020 as lockdowns and restrictions caused most brick-and-mortar retail outlets to shut down. Amazon.com (AMZN, $3,294.00) was perfectly positioned to take advantage of this change in trend. Its vast distribution network, competitive pricing and massive inventory range saw it solidify its position as a leader of modern retail.
Currently valued at around $1.7 trillion, Amazon is ranked the third most valuable company on U.S. stock exchanges. It’s also up 77% over the past year, leading many to wonder whether Amazon can repeat this feat in 2021.
Most Wall Street analysts believe it can, with 32 analysts rating the stock a Buy and only 1 saying Hold. The average consensus price target suggests that AMZN still has some room to grow as we look ahead to the next 12 months.
Monness analyst Brian White agrees with his colleagues and has set a price target of $4,000. He wrote in a commentary note that he sees significant growth opportunities across “the e-commerce segment, AWS, digital media, advertising, Alexa and more,” and that he expects “the COVID-19 to drive accelerated digital transformation, benefiting the company’s business model.”
White went on to mention that Amazon‘s profitability is currently “well below its long-term potential” and highlighted the fact that Amazon continues to invest aggressively in projects that will enable the company to maintain its growth momentum into the future.
Amazon recently announced that it had boosted its in-house cargo airline fleet with the acquisition of 11 Boeing 767-300 planes from Delta Air Lines (DAL) and WestJet. It also invested 278 million euros into opening two new logistics centers in Italy to keep up with the increasing demand for delivery and warehousing during the pandemic.
You can learn more about the analyst community’s views on Amazon shares via TipRanks’ consensus breakdown.
Alibaba
- Market value: $710.9 billion
- Robinhood popularity rank: 2
- TipRanks consensus price target: $327.06 (27% upside potential)
- TipRanks consensus rating: Strong Buy
The world’s largest retailer and multinational technology company, Alibaba ((BA)(BA), $261.38), continues to excite investors, despite the Chinese government’s recent crackdown on anticompetitive behavior among internet companies. Chinese regulators have launched an investigation into Alibaba’s “monopolistic practices” and recently blocked the planned $37 billion IPO of Alibaba affiliate, Ant Group.
Regulators have imposed five regulatory requirements on Ant, which include correcting irregularities in its asset securitization businesses, setting up a holding company for its financial operations and increasing its capital reserve requirements.
Notwithstanding the recent challenges that Alibaba faces, 19 analysts who have reviewed the stock over the past three months have each issued Buy recommendations.
One such proponent is Oppenheimer analyst Jason Helfstein, who remains bullish even though he doubts the listing of Ant Group will happen in 2021. That’s because it will take some time to meet all five of the regulatory requirements.
Helfstein wrote in a research report, “Ant will focus on Digital Payments, while the growth of its consumer credit business should decelerate given the new capital requirement.”
The additional regulatory requirements prompted Helfstein to maintain his Buy rating. That said, he trimmed his valuation of Ant Group to $150 billion from $200 billion, and ultimately lowered his price target on (BA)(BA) shares to $320 from $330.
Oppenheimer’s Investment Thesis values Alibaba’s business ecosystem as one of the most comprehensive in the world. The multitude of differentiated business offerings creates a powerful network with significant barriers to entry, allowing Alibaba to maintain its market dominance over its competitors.
For more information, check out the (BA)(BA) analyst consensus and price target page on TipRanks.
New Residential Investment
mortgages“/>- Market value: $4.1 billion
- Robinhood popularity rank: 1
- TipRanks consensus price target: $11.25 (15% upside potential)
- TipRanks consensus rating: Strong Buy
2020 got off to a difficult start for mortgage real estate investment trusts (mREITs), and New Residential Investment (NRZ, $9.82) was forced to take its punishment along with the rest of the sector. The coronavirus pandemic devastated the mortgage-backed securities (MBS) business as liquidity dried up and investor uncertainty dominated the market.
Looking at the year ahead, Raymond James analyst Stephen Laws believes that NRZ might have weathered the economic storm that was 2020, and maintains a Buy rating on the stock looking forward.
“We are increasing our price target to $11.50 per share from $10.50 per share,” says Laws. “Our new target is based on shares trading at ~110% of September 30 book value, up from our previous multiple of ~100%. Given the strong mortgage banking outlook and improved portfolio financing, we believe a slight premium to book value is appropriate,” in a company report following the release of NRZ’s third-quarter 2020 earnings results.
“We expect strong origination volumes and attractive gain on sale margins to drive strong near-term results, and we continue to expect a dividend increase in 4Q,” he added.
Analysts on Wall Street agree with Laws as each of the six analysts to rate NRZ in the past three months have offered Buy recommendations with upside potential implied by their price targets.
NRZ announced in November that its subsidiary, NewRez LLC, confidentially filed a draft registration statement for a proposed initial public offering (IPO). The NewRez business is expected to report $850 million to $900 million in full-year 2020 pre-tax income, compared to $225 million a year earlier.
To learn more about NRZ analyst forecasts, click on the TipRanks Analysts link.
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Stock Market Analysis Today – 7 Top Robinhood Stocks in 2021: Do the Pros Agree?
