The shares of Robinhood Markets Pre-open Friday: (NASDAQ) fell almost 3% after Will Nance, a Goldman Sachs analyst, downgraded the stock to Sell from Neutral.

According to the analyst, the Street’s current estimates are too high. This includes a very high threshold for HOOD (requires 10% organic revenue growth + macro tailwinds), as noted by the company.

The broker’s low end customers are another reason why a call to downgrade was made. The continued decline in account growth is another factor that can be considered a headwind.

Nance, a client note said that the lack of clarity on the way to profitability would prevent the stock’s re-rating from going higher.

To help Nance become more productive in Robinhood, Nance lists the following three items:

1) We consider an inflection in user-growth necessary for our company to continue scaling its platform.

2) An easier path to near-term profitability

3) More conservative street outlook for revenue growth

Nance is 10%/18% less than 2022/2023 consensus for revenue.

The price target for HOOD shares has been reduced to $13.00 from $15.00.

AvidXchange, NASDAQ:), was also downgraded to Neutral by the analyst.

By Senad Karaahmetovic