Morgan Stanley analyst Michael Cyprys started research coverage on Robinhood’s (NASDAQ:), shares at Equal Weight. The target price was $15.00.

He is cautious about HOOD because he believes that strong competition will impact user growth. You can also consider 2022 a transitional year.

HOOD established a strong presence in retail trading with a mobile app. It offers free stock and options as well as crypto trading. We believe there is a huge opportunity for HOOD as this 150m generation enters their prime years of earning and saving. Cyprys explained that the financial super app Cyprys envisions could offer a wide range of financial services products, with significant revenue potential.

Morgan Stanley expects account growth to be 6%, or 41 million people by 2031. This is significantly lower than the Street consensus at 13%.

Cyprys overall is positive about Robinhood’s potential long-term and future opportunity, however, he sees short-term challenges as well as limited visibility.

Increased interest rates make it more difficult for shareholders to be patient and wait for the progress of growth and to become profitable. HOOD was listed on July 20, 2021 for $38/share. The stock is now down 80% since August’s peak. However, a $7/share cash stash provides some support. Cyprys stated that tough comparisons are possible over the following quarters. Cyprys noted that retail customer engagement in markets has slowed in the difficult macro/geopolitical context, which will impact account growth and transactional revenue.

This price target is close to 6% lower than Tuesday’s closing prices.

By Senad Karaahmetovic