The move suggests some dip-buying or short-covering is showing up following last week’s weakness, despite a cautious tape for discretionary names. Here’s what investors need to know.
Carvana stock is showing upward movement. What’s driving CVNA shares up? What CarMax’s Recent Earnings Mean for CarvanaCarMax last week posted fiscal first-quarter adjusted EPS of $1.31 versus expectations of 94 cents on revenue of $8.01 billion versus $7.41 billion, but its shares slipped as investors focused on weaker retail used-vehicle profitability.
Management also warned that margin pressure is likely to persist as it prioritizes sales growth, which is weighing on sentiment across the used-auto retail group.
Even with the earnings beat, CarMax’s gross profit fell 4.4% to $854.4 million and gross profit per retail used unit dropped $230 to $2,177, reinforcing the idea that pricing competition is still intense.
Critical Price Levels to Watch for CVNACarvana is trying to stabilize near its 20-day simple moving average ($68.29), but the bigger trend picture still leans heavy: the stock is trading 5.3% below its 50-day SMA ($72.20) and 6.9% below its 200-day SMA ($73.50). That bearish "stack" matters because it often turns rallies into sellable bounces, especially after the death cross that formed in March.
For momentum, RSI is the cleaner read right now: at 52.19 it’s basically neutral, which fits a stock that’s chopping rather than trending hard in either direction. RSI measures how stretched buying or selling pressure is, and this level says the stock isn’t oversold even though it’s still working back from a weak spring setup (with a recent swing low in March and swing high in April).
Key Resistance: $73.00 — a round-number area that lines up with the 200-day moving-average zone, where rebounds can stall Key Support: $61.00 — a nearby floor above the recent low zone where buyers previously showed up What Is Carvana and How Does It Operate?Carvana is an e-commerce platform for buying and selling used cars, with revenue coming from used vehicle sales, wholesale vehicle sales, and other sales and revenues. Those "other" streams include selling loans through securitizations or financing partners, plus commissions on vehicle service contracts and GAP waiver coverage.
The key point for today’s read-through is that retail unit economics still drive the story, and that’s exactly where CarMax is flagging ongoing pressure. If peers keep leaning into price cuts to move inventory, it can keep a lid on margin expectations across the online and brick-and-mortar used-car space.
Carvana’s Benzinga Edge Rankings ExplainedBelow is the Benzinga Edge scorecard for Carvana, highlighting its strengths and weaknesses compared to the broader market:
Momentum: Weak (Score: 22.63) — The stock’s recent trend strength is lagging, which fits with price still pinned under key longer-term moving averages. Growth: Strong (Score: 98.93) — The scorecard is flagging a growth-heavy profile, which can keep the stock sensitive to execution and margin expectations. The Verdict: Carvana’s Benzinga Edge signal reveals a growth-heavy profile with weak momentum, meaning the long-term narrative may be intact but the chart still needs to prove it can sustain breakouts. For longer-term bulls, the key is whether price can reclaim the low-$70s area; for risk control, the $61.00 support zone is the nearby "line in the sand."
CVNA Stock Price Movement on MondayCVNA Stock Price Activity: Carvana shares were up 2.28% at $68.08 at the time of publication on Monday, according to Benzinga Pro data.
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What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
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VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
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As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
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Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Tapestry (TPR - Free Report) Founded in 1941 and headquartered in New York, Tapestry, Inc., which was formerly known as Coach, Inc., is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The company offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches. The company sells through direct-to-consumer, wholesale and licensing channels. Tapestry currently operates under two core brands following portfolio rationalization — Coach and Kate Spade. In third-quarter fiscal 2026, Coach generated $1.70 billion in revenues, while Kate Spade contributed $219.6 million.
TPR is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Retail-Wholesale stock. TPR has a Momentum Style Score of A, and shares are up 7.4% over the past four weeks.
For fiscal 2026, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.50 to $6.95 per share. TPR boasts an average earnings surprise of +15.6%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, TPR should be on investors' short list.
Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.
In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Our proprietary system currently recommends Tapestry (TPR - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Studies have shown that stocks with the best growth features consistently outperform the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
Here are three of the most important factors that make the stock of this maker of high-end shoes and handbags a great growth pick right now.
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Tapestry is 15.8%, investors should actually focus on the projected growth. The company's EPS is expected to grow 36.4% this year, crushing the industry average, which calls for EPS growth of 28.7%.
Cash Flow GrowthWhile cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds.
Right now, year-over-year cash flow growth for Tapestry is 10.6%, which is higher than many of its peers. In fact, the rate compares to the industry average of -3.2%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 21.2% over the past 3-5 years versus the industry average of 14.1%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Tapestry have been revising upward. The Zacks Consensus Estimate for the current year has surged 0.1% over the past month.
Bottom LineTapestry has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Tapestry is a potential outperformer and a solid choice for growth investors.
Key Takeaways On May 7, 2026, Tapestry beat on earnings for the eleventh quarter in a row. Tapestry grew revenue by 21% in the fiscal third quarter, including 20% in North America.It is shareholder-friendly, with both a share buyback program and a dividend, yielding 1.1%. Tapestry, Inc. (TPR - Free Report) has two of the most recognizable retail brands in the world in Coach and Kate Spade New York. This Zacks Rank #1 (Strong Buy) is expected to grow its earnings 13.8% this fiscal year.
Tapestry has two global brands, Coach and Kate Spade New York. Coach was founded in 1941 in New York as the Original American House of Leather. Kate Spade was founded in 1993 on a collection of six iconic handbags.
Tapestry operates retail stores and e-commerce channels.
Another Earnings Beat for Tapestry in the Fiscal Third Quarter 2026On May 7, 2026, Tapestry reported its fiscal third quarter 2026 results and beat the Zacks Consensus Estimate by $0.35. Earnings were $1.66 versus the consensus of $1.31.
It was the eleventh earnings beat in a row. Tapestry has only missed on earnings once in the last five years.
Net sales jumped 21% to $1.92 billion and were also up 19% on a constant currency basis.
Gross margin was 76.9% up from 76.1% in the year ago quarter. The 80 basis points improvement in the margin was due to operational improvements of about 190 basis points as well as a favorable impact from the sale of Stuart Weitzman of 70 basis points.
Tariff and duty impacts were negative in the quarter by 180 basis points.
Tapestry acquired over 2.4 million new customers globally in the quarter, led by an increase in the number of GenZ customers. GenZ represented over 35% of new customers in the quarter.
It saw accelerated growth in core leathergoods, led by strong handbag revenue gains at Coach. Handbag units rose more than 20%.
Sales in most geographies were higher with North America, the company’s largest market, up 20%. Greater China jumped 55% and Europe gained 21%.
Only Japan was weak in the quarter, falling 10%.
Tapestry Raised Full Year 2026 GuidanceAfter such a strong quarter, it’s not surprising that Tapestry raised its fiscal full year 2026 guidance.
It now expects revenue of around $7.95 billion, which is growth of about 14%.
Earnings are now expected around $6.95, up from its previous guidance of $6.40 to $6.45.
Given the higher guidance, it’s not surprising that the analysts have raised earnings estimates. Two estimates are higher in the last 30 days and seven are higher in the prior 60 days.
The Zacks Consensus is calling for $6.95, up from $6.87 just 30 days ago. That’s earnings growth of 36.3% versus FY 2025 when the company made $5.10.
Two estimates are also higher in the last month for FY2027. It has pushed the Zacks Consensus for FY2027 to $7.61 from $7.46. This is another 9.4% earnings growth.
This is what it looks like on the price and consensus chart.
Image Source: Zacks Investment Research
Shares of Tapestry are up Double Digits in 2026Shares of Tapestry have rallied in the last year and while things got rockier in 2026 when the Middle East conflict began, the shares are still up double digits this year.
Image Source: Zacks Investment Research
Tapestry is attractively priced with a forward price-to-earnings (P/E) of 20.6. This is under the average P/E of the S&P 500 which is at 21.
The company is also shareholder friendly. It has been generating significant free cash flow.
It expects to return $1.6 billion to shareholders this year, up from its previous guidance of $1.5 billion. This is approximately 100% of its anticipated adjusted free cash flow.
The company pays a dividend, which is yielding 1.1%. It also has a shareholder buyback program of $1.3 billion. During the fiscal third quarter it repurchased about $150 million in shares. Year-to-date it has spent a total of $1.05 billion out of the $1.3 billion.
For investors looking for strong global retail brands with double digit revenue growth, Tapestry should be on your short list.
Key Takeaways GCO, DBI, SFIX, TLYS and FOSL are highlighted as small-cap picks with Buy ratings. SFIX cites rising revenue per client, AI-driven efficiencies and broader assortment.GCO, DBI, TLYS and FOSL saw earnings estimates improve, with some up more than 100%. Small-cap stocks are witnessing a solid rally in 2026, ahead of their large-cap peers. The two small-cap-centric benchmarks — the Russell 2000 and the S&P 600 Indexes — are up 17.25 and 17.1%, respectively, year to date.
On the other hand, the Retail - Apparel and Shoes industry entered 2026 on a relatively stable note despite a volatile macroeconomic environment, with demand increasingly shaped by more selective, value-conscious consumers and faster-moving trends. This space is benefiting from strong premiumization and digital momentum.
The Zacks-defined Retail – Apparel and Shoes industry is currently within the top 36% of the Zacks Industry Rank. Since it is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
Here, we recommend five small cap apparel and shoes stocks with a favorable Zacks Rank for a stable portfolio. These are: Genesco Inc. (GCO - Free Report) , Designer Brands Inc. (DBI - Free Report) , Stitch Fix Inc. (SFIX - Free Report) , Tilly's Inc. (TLYS - Free Report) and Fossil Group Inc. (FOSL - Free Report) .
Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Genesco Inc.Genesco is a specialty retail and branded company that sells footwear and accessories in retail stores throughout the United States, Canada, the United Kingdom and the Republic of Ireland. GCO sells products principally under the brand names Journeys, Journeys Kidz, Little Burgundy, Schuh, Schuh Kids, and Johnston & Murphy.
GCO also offers products on various websites. In addition, GCO sells footwear at wholesale under its Johnston & Murphy brand, the licensed Levi's brand, the licensed Dockers brand, the licensed Bass brand, and other brands.
Genesco has an expected revenue and earnings growth rate of -0.02% and 55.2%, respectively, for the current fiscal year (ending January 2027). The Zacks Consensus Estimate for the current fiscal year’s earnings has improved 4.7% over the last 30 days.
Designer Brands Inc.Designer Brands designs, produces and retails footwear and accessories. DBI offers shoes, boots, sandals, sneakers, socks, handbags and accessories. DBI’s operating segment consists of the DSW segment, which includes DSW stores and dsw.com and the Affiliated Business Group segment.
Designer Brands has an expected revenue and earnings growth rate of 0.5% and more than 100%, respectively, for the current fiscal year (ending January 2027). The Zacks Consensus Estimate for the current fiscal year’s earnings has improved 8.6% over the last seven days.
Stitch Fix Inc.Stitch Fix is demonstrating solid momentum, supported by stronger client monetization and improved operational efficiency. SFIX’s average order value and revenue per active client are rising, reflecting increased customer spending.
Cost leverage has improved through efficiencies in SG&A, warehouse operations and AI-driven processes. SFIX’s hybrid model, combining AI personalization with human stylists, along with expanded categories and brand assortment, strengthens its competitive position. SFIX expects continued growth in revenue per client and overall revenues.
Stitch Fix has an expected revenue and earnings growth rate of 4.9% and 71.7%, respectively, for the next fiscal year (ending July 2027). The Zacks Consensus Estimate for next fiscal year’s earnings has improved 42.9% over the last seven days.
Tilly's Inc.Tilly's is a specialty retailer in the action sports industry selling clothing, shoes and accessories. TLYS distributes t-shirts, sweatshirts, jackets, shorts, pants, jeans, sweaters, swimwear, shoes and accessories for men, women and kids through its website.
TLYS sells denim apparel and cologne for guys, boys and juniors and apparel, footwear and accessories for juniors and girls under RSQ, Full Tilt, Blue Crown and Infamous brand names. TLYS sells its merchandise through its stores and e-commerce website, www.tillys.com.
Tilly’s has an expected revenue and earnings growth rate of 4.9% and 89.7%, respectively, for the current fiscal year (ending January 2027). The Zacks Consensus Estimate for the current fiscal year’s earnings has improved 64.7% over the last 30 days.
Fossil Group Inc.Fossil Group is involved in the designing, marketing and distribution of consumer fashion accessories. FOSL’s product portfolio includes men's and women's watches, handbags, belts, small leather goods, jewelry, sunglasses, hats, gloves and scarves, jeans, outerwear, fashion tops and bottoms, tee shirts as well as optical frames.
FOSL’s brands include MICHELE, Zodiac, Relic, Emporio Armani, DKNY, Armani Exchange, Michael Kors, Diesel, Burberry, Marc by Marc Jacobs, Adidas, Skagen Denmark, and Karl Lagerfeld.
FOSL operates in four different segments: the North America Wholesale segment, the Europe Wholesale segment, the Asia Pacific Wholesale segment and the Direct-to-Consumer segment. FOSL serves the market through department stores, specialty retail stores, specialty watch and jeweler stores, retail and outlet stores, mass market stores, the clothing stores as well as through its catalogs and website.
Fossil Group has an expected revenue and earnings growth rate of -4.9% and 89.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved more than 100% over the last 30 days.
June 23, 2026 07:00 ET | Source: Fossil Group, Inc.
RICHARDSON, Texas, June 23, 2026 (GLOBE NEWSWIRE) -- Fossil Group, Inc. (NASDAQ: FOSL) announced today that the Company is set to join the small-cap Russell 2000® Index at the conclusion of the June 2026 Russell Reconstitution. This inclusion will become effective when the U.S. market closes on June 26, 2026.
Franco Fogliato, CEO, stated, “We are pleased to join the Russell 2000 Index, which we believe will enhance Fossil Group’s visibility among investors as we continue to execute on our turnaround plan and advance on our path to long-term profitable growth.”
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity market and is widely used by investment managers and institutional investors for index funds and as a benchmark for active investment strategies.
About Fossil Group, Inc.
Fossil Group, Inc. is a global design, marketing, distribution and innovation company specializing in lifestyle accessories. Under a diverse portfolio of owned and licensed brands, our offerings include watches, jewelry, handbags, small leather goods, belts and sunglasses. We are committed to delivering the best in design and innovation across our owned brands, Fossil, Michele, Relic, Skagen and Zodiac, and licensed brands, Armani Exchange, Diesel, Emporio Armani, Michael Kors, Skechers and Tory Burch. We bring each brand story to life through an extensive distribution network across numerous geographies, categories, and channels. Certain press release and SEC filing information concerning the Company is also available at www.fossilgroup.com.
Rivian Automotive stock is building positive momentum. What’s driving RIVN shares up? What Is Rivian’s Robotics Spin-Out Catalyst?RJ Scaringe is backing a robotics spin-out called Mind Robotics, which launched in late 2025 from an internal effort known as "Project Synapse," and has raised over $1 billion across three rounds. The latest round values Mind at $3.4 billion, and Rivian is expected to be the first customer using its Normal, Illinois plant as a live deployment site for AI-powered humanoid robots.
Rivian's robotics structure also contrasts with Tesla's in-house Optimus push, where mass production began in January 2026 with a 50,000-unit target by year-end, a competitive benchmark for factory-automation narratives in EV manufacturing. That comparison matters to RIVN because investors often price automation as a margin lever when EV demand and pricing get choppy.
Rivian's longer-term product catalyst is also shifting from concept to commercialization as the company began delivering the R2 this month at a $58,000 starting price, with a cheaper $45,000 version promised for 2027. Early lease quotes near $829 a month have kept affordability in focus as the R2 tries to pull share from Tesla's mass-market base.
RIVN Technical Analysis: Key Levels To WatchRivian is trading above its major moving averages, sitting 3.8% above the 20-day SMA ($15.74) and 4.3% above the 200-day SMA ($15.67), which keeps the near-term trend pointed up. That said, the longer-term backdrop is still mixed because the death cross from May (50-day SMA below the 200-day SMA) remains in place even as the 20-day SMA has moved above the 50-day SMA.
RSI is 51.13, a neutral reading that suggests momentum isn't stretched and the stock is more in "prove it" mode than in a chase setup. In that context, traders often look for follow-through above nearby pivots rather than expecting an immediate breakout.
Key Resistance: $18.00 — a round-number area that can act as a natural spot for rallies to stall Key Support: $14.50 — a nearby floor that sits below the current price and marks a level where buyers previously stepped in What Is Rivian and How Does It Operate?Rivian is a battery electric vehicle automaker that sells vehicles in the US and Canada, with a lineup that includes a luxury truck, a full-size SUV, and a delivery van. The company delivered over 42,000 vehicles in 2025 and plans to begin selling a midsize SUV in 2026.
Beyond vehicles, Rivian develops electronic control units and related auto software through a joint venture with Volkswagen, and it's also building autonomous driving software aimed at both its own vehicles and future robotaxis on the Uber ride-hailing network. That makes the Mind Robotics effort relevant to the stock narrative because it adds another "technology platform" angle tied directly to factory productivity and manufacturing execution.
RIVN Stock Price Action Update for WednesdayRIVN Stock Price Activity: Rivian Automotive shares were trading 1.82% higher at $16.22 at the time of publication on Wednesday, according to Benzinga Pro data.
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Rivian Automotive (RIVN 0.10%) has spent years getting investors excited about its cheaper vehicle. That vehicle, the R2 SUV, finally started reaching customers this month. One week later, the company cut jobs.
The layoffs hit less than 2% of Rivian's workforce, landing on the sales and marketing side of the business rather than the factory floor.
"We recently restructured a handful of teams within Rivian as we work to profitably scale our business," the company said in a statement.
Shares had slipped 4.5% on the news, leaving the company worth around $20 billion and still down for the year despite a strong run into the R2's launch.
But are these job cuts bad news or something else?
Image source: The Motley Fool.
The cuts are small and targeted Measured against the 17,000 employees CEO RJ Scaringe recently said Rivian has, less than 2% works out to about 300 jobs, concentrated in one corner of the company. And those cuts sit alongside a much larger hiring push recently -- headcount has climbed from about 15,200 at the end of last year, driven mostly by the R2 ramp and Rivian's self-driving program. So, this looks less like a retreat than a reshuffle, pulling money away from customer-facing roles and toward building cars and software.
Still, trimming sales and marketing staff in the same week you launch your highest-volume vehicle yet is an unusual sequence. It points to a company under pressure to spend less while ramping its most important product.
What the layoffs don't fix The deeper problem isn't the size of the marketing team. It's the cost of building each vehicle.
Rivian posted $119 million in consolidated gross profit in the first quarter. But nearly all of it came from software and services tied to a joint venture with Volkswagen. Strip that out, and the core vehicle business lost about an average of $6,000 per vehicle delivered, before counting overhead and research. A year earlier, that same segment turned a gross profit. The swing came largely from regulatory credits (the clean-vehicle credits Rivian sells to other automakers), which shrank by $100 million and had been propping up the segment.
The R2 is meant to close that gap. Its parts are expected to cost about half what they do on the pricier R1 line, and Rivian is targeting positive automotive gross profit by the end of 2026 as R2 volumes build. But the early months of a launch are the most expensive.
"[W]e expect the complexity of a new vehicle launch will negatively impact our Automotive gross profit in the second and third quarters before becoming a benefit for our overall operations in the fourth quarter as we ramp production and deliveries," said chief financial officer Claire McDonough during the company's first-quarter earnings call.
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At the same time, Rivian is spending more than ever on autonomous driving -- now its largest research area -- as part of a robotaxi partnership with Uber Technologies. That spending is why the company pushed back its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability target in March, one it had previously set for 2027. So even as Rivian cuts customer-facing jobs to guard near-term margins, it's widening a bet that won't pay off for years.
So, are these job cuts bad news? Not necessarily. But it's not necessarily good news either. Instead, it's more of a byproduct of the company's evolution. Ultimately, Rivian has billions in cash to fund the ramp, and a sliver of sales staff won't decide whether the R2 turns profitable. What will determine its profitability over the long haul is the success of its vehicles and the economics of its business. And we'll look for signals on both of these themes in the back half of the year, when we'll see whether R2 deliveries help Rivian's total deliveries climb toward the 62,000 to 67,000 vehicles Rivian has guided for, and whether the per-vehicle loss starts narrowing.
Electric SUV maker Rivian Automotive (Nasdaq: RIVN) has cut hundreds of jobs as it seeks to achieve profitability, the company confirmed.
The layoffs come just days after the automaker launched its new R2 mid-size SUVs to the public. Here’s what you need to know about Rivian’s layoffs and how the company’s stock price has reacted.
What’s happened?Yesterday, Rivian confirmed it was initiating another round of job cuts. The last time the EV maker initiated mass layoffs was in October, when it laid off more than 600 workers following the Trump administration’s elimination of the $7,500 electric vehicle credit.
At the time, the layoffs amounted to about 4.5% of its workforce.
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This time around, Rivian says the job cuts will affect fewer than 2% of its workforce. The latest job cuts were first reported by the Wall Street Journal.
Rivian had just over 15,200 employees at the end of 2025, so a reduction of less than 2% in its workforce equates to around 300 job losses. The cuts will primarily affect those working in the company’s service and customer departments, which handle sales and marketing for Rivian.
According to Reuters, those being laid off will have the option of applying for other open roles at the company.
Rivian has been sued over allegations that the EV maker made false claims about the autonomous driving capabilities of its R1T truck and R1S SUV models.
The class-action complaint, which was filed Wednesday in the U.S. District Court for the Central District of California, focuses on the first-generation models of the R1T and R1S and claims that Rivian represented that these flagship vehicles would be capable of hands-free, eyes-off driving.
This kind of capability is also called Level 3 autonomy, a designation by the Society of Automotive Engineers (SAE) that means the vehicle can automatically handle steering, acceleration, and braking without the driver’s hands on the wheel or eyes on the road in certain conditions such as highways or at low speeds. This doesn’t mean these vehicles are fully autonomous; the human driver is still expected to stay attentive and take over when necessary.
The lawsuit alleges Rivian falsely promised, over a five-year period and through a coordinated nationwide marketing campaign, that it would make its hands-free driver-assistance system — known as Driver+ — standard in every vehicle it builds. Among the appearances cited in the suit: Rivian CEO RJ Scaringe’s appearance at TechCrunch Disrupt 2022, where he reportedly made representations about the company’s autonomous driving ambitions.
“No software update — no matter how sophisticated — will enable its Gen 1 Vehicles to perform as advertised,” the complaint reads. “Rivian unquestionably knew that its Gen 1 Vehicles would never be capable of Level 3 autonomy or ‘true hands-free driving’ yet continued to tout the supposed capabilities of its vehicles to induce consumers to purchase them.”
Rivian declined to comment on the lawsuit, citing pending litigation.
The lawsuit, which includes three named plaintiffs, makes claims against Rivian for fraud, negligent misrepresentation, and unjust enrichment. Coleman Law and Tycko & Zavareei, the law firms representing the plaintiffs, have requested a jury trial.
It wouldn’t be the first time Rivian has faced a successful legal challenge. Last year, the company agreed to pay $250 million to settle a class-action shareholder lawsuit filed after it suddenly hiked prices on its R1 pickup truck and SUV in 2022.
Rivian’s first-generation R1T and R1S vehicles do not offer hands-free driving. Its second-generation vehicles, which were overhauled in 2024, do. The second-generation vehicles look materially the same, but Rivian revamped their internals, including the battery pack and suspension system, and the electrical architecture, interior seats, and sensor stack.
As part of the revamp, the second-gen R1 vehicles were equipped with the “Rivian Autonomy Platform,” which comes standard and includes 11 cameras, five radar sensors, and a computer that is 10x more powerful than the previous system, the company told TechCrunch at the time.
The advanced driver-assistance system in the second-gen models initially included adaptive cruise control, which maintains speed and distance behind vehicles on the highway, and a highway assist feature that automatically steers, brakes, and accelerates on select highways.
Last year, Rivian rolled out “Universal Hands-Free” driving via a software update pushed out to second-gen R1 vehicles. The feature allows drivers to take their hands off the wheel on more than 3.5 million miles of roads in the United States and Canada, including a mix of highways and surface streets, as long as there are visible lane lines.
Rivian isn’t the only automaker to face legal challenges over promises to deliver self-driving features. Tesla and its CEO Elon Musk have spent a decade claiming that its vehicles would be fully autonomous via its Full Self-Driving software. Some owners have sued Tesla for failing to deliver unsupervised Full Self-Driving.
Tesla has also come under regulatory scrutiny for claims about the capabilities of its FSD and Autopilot advanced driver-assistance systems. The California Department of Motor Vehicles filed accusations alleging Tesla violated state law by deceptively marketing Autopilot, its basic advanced driver-assistance system, as well as its more capable Full Self-Driving software. A judge ruled in the DMV’s favor, but the agency decided in February not to suspend Tesla’s sales and manufacturing licenses, a 30-day penalty it opted to forgo because the EV maker has stopped using the term “Autopilot” in its California marketing.
This article originally published at 11 a.m. PT.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Kirsten Korosec is a reporter and editor who has covered the future of transportation from EVs and autonomous vehicles to urban air mobility and in-car tech for more than a decade. She is currently the transportation editor at TechCrunch and co-host of TechCrunch’s Equity podcast. She is also co-founder and co-host of the podcast, “The Autonocast.” She previously wrote for Fortune, The Verge, Bloomberg, MIT Technology Review and CBS Interactive.
You can contact or verify outreach from Kirsten by emailing [email protected] or via encrypted message at kkorosec.07 on Signal.
Rivian has been sued over allegations that the EV maker made false claims about the autonomous driving capabilities of its R1T truck and R1S SUV models.
The class-action complaint, which was filed Wednesday in the U.S. District Court for the Central District of California, focuses on the first-generation models of the R1T and R1S and claims that Rivian represented that these flagship vehicles would be capable of hands-free, eyes-off driving.
This kind of capability is also called Level 3 autonomy, a designation by the Society of Automotive Engineers (SAE) that means the vehicle can automatically handle steering, acceleration, and braking without the driver’s hands on the wheel or eyes on the road in certain conditions such as highways or at low speeds. This doesn’t mean these vehicles are fully autonomous; the human driver is still expected to stay attentive and take over when necessary.
The lawsuit alleges Rivian falsely promised, over a five-year period and through a coordinated nationwide marketing campaign, that it would make its hands-free driver-assistance system — known as Driver+ — standard in every vehicle it builds. Among the appearances cited in the suit: Rivian CEO RJ Scaringe’s appearance at TechCrunch Disrupt 2022, where he reportedly made representations about the company’s autonomous driving ambitions.
“No software update — no matter how sophisticated — will enable its Gen 1 Vehicles to perform as advertised,” the complaint reads. “Rivian unquestionably knew that its Gen 1 Vehicles would never be capable of Level 3 autonomy or ‘true hands-free driving’ yet continued to tout the supposed capabilities of its vehicles to induce consumers to purchase them.”
Rivian declined to comment on the lawsuit, citing pending litigation.
The lawsuit, which includes three named plaintiffs, makes claims against Rivian for fraud, negligent misrepresentation, and unjust enrichment. Coleman Law and Tycko & Zavareei, the law firms representing the plaintiffs, have requested a jury trial.
It wouldn’t be the first time Rivian has faced a successful legal challenge. Last year, the company agreed to pay $250 million to settle a class-action shareholder lawsuit filed after it suddenly hiked prices on its R1 pickup truck and SUV in 2022.
Rivian’s first-generation R1T and R1S vehicles do not offer hands-free driving. Its second-generation vehicles, which were overhauled in 2024, do. The second-generation vehicles look materially the same, but Rivian revamped their internals, including the battery pack and suspension system, and the electrical architecture, interior seats, and sensor stack.
As part of the revamp, the second-gen R1 vehicles were equipped with the “Rivian Autonomy Platform,” which comes standard and includes 11 cameras, five radar sensors, and a computer that is 10x more powerful than the previous system, the company told TechCrunch at the time.
The advanced driver-assistance system in the second-gen models initially included adaptive cruise control, which maintains speed and distance behind vehicles on the highway, and a highway assist feature that automatically steers, brakes, and accelerates on select highways.
Last year, Rivian rolled out “Universal Hands-Free” driving via a software update pushed out to second-gen R1 vehicles. The feature allows drivers to take their hands off the wheel on more than 3.5 million miles of roads in the United States and Canada, including a mix of highways and surface streets, as long as there are visible lane lines.
Rivian isn’t the only automaker to face legal challenges over promises to deliver self-driving features. Tesla and its CEO Elon Musk have spent a decade claiming that its vehicles would be fully autonomous via its Full Self-Driving software. Some owners have sued Tesla for failing to deliver unsupervised Full Self-Driving.
Tesla has also come under regulatory scrutiny for claims about the capabilities of its FSD and Autopilot advanced driver-assistance systems. The California Department of Motor Vehicles filed accusations alleging Tesla violated state law by deceptively marketing Autopilot, its basic advanced driver-assistance system, as well as its more capable Full Self-Driving software. A judge ruled in the DMV’s favor, but the agency decided in February not to suspend Tesla’s sales and manufacturing licenses, a 30-day penalty it opted to forgo because the EV maker has stopped using the term “Autopilot” in its California marketing.
This article originally published at 11 a.m. PT.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Kirsten Korosec is a reporter and editor who has covered the future of transportation from EVs and autonomous vehicles to urban air mobility and in-car tech for more than a decade. She is currently the transportation editor at TechCrunch and co-host of TechCrunch’s Equity podcast. She is also co-founder and co-host of the podcast, “The Autonocast.” She previously wrote for Fortune, The Verge, Bloomberg, MIT Technology Review and CBS Interactive.
You can contact or verify outreach from Kirsten by emailing [email protected] or via encrypted message at kkorosec.07 on Signal.
A few years ago, growth investors were rushing toward electric vehicle (EV) stocks. But today, high-growth AI stocks and big IPOs have largely overshadowed the EV market. Concerns about lower government subsidies, higher tariffs, supply chain disruptions, inflation, and elevated interest rates are also making EV stocks less attractive -- even if the market is still growing.
From 2026 to 2033, Grand View Research still expects the global EV market to grow at a 26.7% CAGR as EVs continue to replace gas-powered vehicles. To capitalize on that trend, investors should buy these two EV stocks while the bulls look the other way.
Image source: Rivian.
Rivian Automotive Rivian (RIVN 0.10%), which went public at $78 in 2021, currently trades at about $16. But it's valued at less than two times next year's sales, while Tesla (TSLA 4.96%) trades at 13 times next year's sales. Rivian's low valuation reflects its ongoing production issues.
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Before launching its R2 SUV this year, Rivian only sold three vehicles: the R1T pickup, R1S SUV, and custom electric delivery vans for Amazon and other companies.
It more than doubled production from 24,337 vehicles in 2022 to 57,232 in 2023, but only produced 49,476 in 2024 and 42,284 in 2025. It blamed that slowdown on supply chain constraints, reduced EV subsidies, and intense competition from other EV makers. The high starting prices of about $77,500 for the R1T and R1S further limited their mainstream appeal.
However, Rivian expects the R2 -- which launched at $57,990 this March -- to boost its annual deliveries to 62,000-67,000 this year. Analysts expect its revenue to rise 31% for the full year. It plans to launch a cheaper version of the R2 for about $45,000 in late 2027.
The R2 actually costs less to manufacture than its R1 vehicles, since it uses fewer electronic control units, an upgraded battery pack, simpler wiring, and larger castings. Therefore, the rising sales of the R2 should boost its gross margins and narrow its losses.
From 2025 to 2028, analysts expect Rivian's revenue to more than triple, from $5.4 billion to $16.9 billion, as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turn positive in the final year. We should take those rosy estimates with a grain of salt, but Rivian might be on the cusp of a historic turnaround if the R2 attracts more drivers.
Nio Nio (NIO +1.09%), a major EV maker in China, went public at $6.26 per ADR in 2018. But today, it trades at about $5 and looks like a screaming bargain at less than one times next year's sales.
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Nio's discount reflects the ongoing concerns regarding its steep losses and competition from other EV makers. But from 2020 to 2025, its annual deliveries surged from 43,728 to 326,028 vehicles, and its revenue rose at a 40% CAGR.
Nio sells a wide range of electric sedans and SUVs and differentiates itself from competitors with swappable batteries, which can be quickly replaced at its own battery-swapping stations as a faster alternative to charging. It also produces its own Shenji chips, which are more powerful than Nvidia's Orin-X chips, to support its autonomous driving features.
Nio is still growing rapidly as its namesake brand captures a larger share of China's premium EV market. It's selling more low-end SUVs and compact cars through its new ONVO and Firefly sub-brands, respectively, and it's gradually expanding into the European market. From 2025 to 2028, analysts expect its revenue to nearly double to 174.4 billion yuan ($25.8 billion).
Nio's vehicle margins are improving as economies of scale kick in, and its recently spun off its unprofitable chipmaking segment (as GeniTech) to reduce its operating expenses. It's stayed profitable for the past two quarters, and analysts expect it to post its first full-year profit in 2027. All of these catalysts suggest Nio's stock is grossly undervalued -- and it could deliver multibagger gains over the next few years if the market revalues it as a growth stock again.
Amazon (AMZN +0.79%) has an impeccable track record. The e-commerce specialist leads several industries, generates consistent revenue, earnings, and cash flow, and has delivered market-crushing returns over the long run. But can the company's stock portfolio perform nearly as well? If it does, it may be because of its largest current holding, Rivian (RIVN 0.10%), an electric vehicle (EV) maker. A little over 90% of Amazon's public equity portfolio is in this single stock. Should investors also be bullish on Rivian?
Image source: The Motley Fool.
A long-standing partnership In February 2019, Rivian announced a $700 million investment round led by Amazon. That was more than two and a half years before the EV company went public. What was Amazon's reason behind this move? The e-commerce leader has a massive logistics network, including a fleet of vehicles and delivery drivers. By using EVs for transport and deliveries, the company might reduce fuel (and other) expenses.
That's why it made sense for Amazon to help fund a company like Rivian capable of providing the EVs it needs. Rivian has done exactly that. Amazon now has over 30,000 electric delivery vans on the road, provided to it by its partner. The cloud computing specialist plans to get to at least 100,000 by 2030. Amazon now owns roughly 158.36 million shares of Rivian, making it one of its largest shareholders.
The retail investing angle Investing in Rivian might have made sense for Amazon, but would it also be a good move for average retail investors? On the one hand, there are good reasons to be bullish on the stock. Rivian's first-quarter financial results were pretty strong. The company's revenue increased by 11% year over year to $1.4 billion. That was despite a slowdown in the EV market in the U.S. during the first quarter.
Further, Rivian is launching its new model, the R2. This is especially important since the R2 is a mass-market model with a much more approachable starting price than its previous vehicles. Rivian is looking to make a dent in the large midsize SUV space. Tesla's (TSLA 4.96%) Model Y competes in this niche, and it has been the world's best-selling vehicle (EV or not) over the past few years. That's the act Rivian is trying to follow. If it can, expect the company's revenue to soar.
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Then there is Rivian's attempt to reach level 4 self-driving (when cars can drive themselves with no human intervention). The company made a deal with Uber Technologies (UBER 1.58%) to provide the ride-hailing giant with a fleet of self-driving robotaxis to be rolled out in various cities starting in 2028. If Rivian meets the timeline outlined in this deal, it could secure up to $1.25 billion in investments from Uber. Just as important, Rivian might establish itself as a leader in the autonomous vehicle market and secure deals with other corporations. That's the bull case for the company, one that could lead to excellent returns if it materializes.
However, Rivian's shares have declined by 13% this year for a reason: Despite massive upside potential, the stock carries significant risks. The recent slowdown in the EV market may affect the company's launch of the R2, for instance. And although it was able to escape it during the first quarter, it did so because it sold a higher mix of commercial vans during that period, as it continues to fulfill its long-term contract with Amazon. These vans carry a lower average unit price and could eventually squeeze the company's margins.
That's why the R2 is so important, and if its launch flops -- perhaps because of recent weakness in the industry -- Rivian will be in trouble. Further, the company might fail to achieve full self-driving capabilities. That would put its deal with Uber in jeopardy. All these factors (and others) are worth considering before initiating a position in Rivian. My view is that the stock could be a great pick for contrarian investors who are comfortable with volatility -- and there will be plenty of that regardless of which way the stock moves. But risk-averse investors should look elsewhere.
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Rivian's R2 is a make-or-break product. Rivian Rivian's future may ride on a five-seat SUV with animatronic-looking headlights.
The R2 — Rivian's new midsize SUV that launched to customers on June 9 — hits the sweet spot on paper: It (eventually) starts at $44,990, delivers around 300 miles of range across trims, and competes in America's best-selling new-vehicle segment: midsize SUVs.
That makes it super important for Rivian.
If it works, Rivian could join Tesla in the tiny club of modern American automaker startups that have reached sustained profitability. If it doesn't, it risks joining the gigantic graveyard of we-tried-and-burned-through-lots-of-cash EV startups (we're looking at you, Fisker, Canoo, Lordstown, Nikola, Bollinger, et al.).
Business Insider reviewed customer communications and spoke with early R2 buyers to map when customers can place their orders in detail, including trims and drivetrain options, paint colors, interiors, wheels, and future self-driving hardware.
Here's what we found:
You may see these R2s on the road todayThe first R2s to reach customers are the $57,990 Performance models with the Launch Package. Several have been spotted on the road (and their pictures subsequently been posted on social media) across the US.
Those vehicles are available to order in six exterior colors: Esker Silver, Glacier White, Midnight, Catalina Cove, Half-Moon Grey, and Launch Green. The 20- and 21-inch wheels are also available.
The only available interior color is Black Crater.
Customers speaking to Business Insider have reported lease prices ranging from $829 to just over $1,000 a month. Delivery estimates have ranged from three to 12 weeks.
And in the future, you can order…First, a new, differently colored batch of R2 Performance options is expected to become available for order later this year.
Forest Green exterior paint and the Coastal Cloud Signature interior are expected in August 2026, while a purple Borealis exterior paint (shown above) is expected in September 2026.
Then, there will be new trims and powertrain options. The $53,990 Premium trim is expected in late 2026, while the initial Standard trim options are expected in spring of 2027.
Finally, several drivetrain configurations are arriving on different schedules. Rear-wheel-drive Long Range and all-wheel-drive Long Range versions are expected in spring 2027.
The lowest-cost, $44,990 rear-wheel-drive Standard trim is expected in summer 2027.
Rivian also expects to offer a lidar configuration in late 2026, which will help steer its self-driving ambitions, the company said.
Rivian's Model 3 moment
Auto analysts have compared Rivian's R2 launch to Tesla's rollout of their Model 3 sedan. Sjoerd van der Wal/Getty Images Seth Goldstein, an auto industry analyst at Morningstar, told Business Insider he expects the R2 could be popular enough to help America get out of its EV sales slump.
John Rosevear, a contributing analyst at The Motley Fool, is also bullish on the R2, telling Business Insider that he estimates Rivian could start turning a profit in four to six quarters of R2 sales.
For many analysts, the R2's launch reminds them of Tesla's Model 3 moment. Before the launch of the sub-$50,000 EV sedan in 2017, Elon Musk's startup relied entirely on sales of premium products — the Model X, Model S, and Roadster. The Model 3 bridged the gap between EV tech optimism and reasonable affordability.
Rivian could follow the same trajectory if all goes well. CEO RJ Scaringe has said he understands the stakes.
"The launch of R2 really ignites the business," Scaringe said during a podcast interview in October. "You need a certain level of scale, which R2 brings for us."
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Ben Shimkus You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Ben Shimkus is a reporter for the Business News desk. He writes about cars, transportation, retail, and jobs. Ben's reporting has appeared in Rolling Stone, The Verge, Automotive News, USA Today, AutoBody News, LGBTQ Nation, TopSpeed, and Out Magazine. He's also held staff writing positions at The U.S. Sun and the Daily Mail. He graduated from NYU with a Master's in journalism in 2024. Email Ben at [email protected] or message him privately on Signal at bshimkus.41.
After its record-breaking initial public offering (IPO), Space Exploration Technologies (SPCX +5.33%), known as SpaceX, is now primed to go on a spending spree. In total, the company believes it is chasing an addressable market worth $28.5 trillion. More than 90% of that value, however, is tied up exclusively in artificial intelligence (AI) opportunities, not rockets or satellites.
With IPO proceeds totaling $86.7 billion, plus a possible $20 billion bond sale, SpaceX will aggressively invest in its AI business during the coming months and years. Which AI opportunities in particular will SpaceX and its founder, Elon Musk, target?
Scaling its data center infrastructure will be at the top of its list. That increase in compute power, however, will be used for a variety of purposes, one of which will surely be advancing the models that power autonomous driving systems.
Earlier this year, Tesla (TSLA 4.96%) -- another Musk company -- invested $2 billion into xAI, Musk's AI start-up. One month later, SpaceX merged with xAI.
It's not hard to connect the dots here. AI is a key enabler of self-driving technologies. And the future of Tesla is no longer relegated to simply selling cars but to operating a global robotaxi fleet -- an opportunity some experts value at $10 trillion long term.
xAI will perhaps be the biggest recipient of SpaceX's post-IPO spending. And because Tesla holds a direct stake in that business, expect xAI to allocate some of its resources to advancing AI systems that will help Tesla better capture the emerging robotaxi market.
Oddly enough, this situation could help an unrelated EV stock: Rivian (RIVN 0.10%). There's a surprising connection here that many investors fail to appreciate.
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How SpaceX's AI spending will end up helping Rivian The global rollout of robotaxis is coming sooner than many expect. And the value of this market may also exceed most expectations.
"We think $8 trillion to $10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," predicts Cathie Wood, CEO of Ark Invest. "That's how quickly AI is going to cause these things to happen."
Other experts agree. "While L4 robo-taxis are now available in the first cities in the United States and China, the global rollout of robotaxis is now expected to become a reality at a large scale in 2030," concludes a research report from McKinsey. "Overall, experts expect that robotaxis will be the first commercial application for L4 in mobility -- not privately owned cars."
Image source: Rivian.
Major tech firms are already raising billions of dollars to tackle the nascent but high-potential robotaxi market. Alphabet (GOOG 0.90%)(GOOGL 1.06%), the parent company of Google, recently raised $16 billion for its Waymo robotaxi service, valuing that business at $126 billion. Uber Technologies (UBER 1.58%) has also committed more than $10 billion to scale its own robotaxi service.
But unlike Tesla, neither company can produce its own vehicles in-house. So if Tesla can ramp its autonomy capabilities quicker than before, thanks to SpaceX's elevated spending on xAI, other robotaxi competitors may fall behind in the critical area of physical vehicle production.
We're already seeing competitors respond to this reality. Earlier this year, Uber invested $1.25 billion in Rivian in exchange for as many as 50,000 Rivian vehicles -- which will be used to power Uber's robotaxi arm.
In a nutshell, the SpaceX IPO could indirectly accelerate the transition to robotaxis. Tesla can both produce its own vehicles and deploy its own self-driving software. Most of its competitors, however, lack physical manufacturing capabilities.
All this should help Rivian, a company investing heavily in producing robotaxi-capable vehicles, but that does not yet seem to be pursuing the launch of its own robotaxi service. In the coming years, I expect Rivian to become a key supplier to the robotaxi industry. Its deal with Uber is an early testament to that potential.
Down the road, I wouldn't be surprised to see a capital-rich big tech competitor buy the company outright to ensure its robotaxi arm remains as vertically integrated as Tesla's.
Rivian Automotive stock is among today’s weakest performers. Why is RIVN stock falling? The latest storyline investors are weighing is CEO RJ Scaringe’s push into humanoid robotics via a spin-out called Mind Robotics, which launched in late 2025 from "Project Synapse" and has raised over $1 billion across three rounds. The most recent round values Mind at $3.4 billion, and Rivian is expected to be the first customer, using its Normal, Illinois plant as a live deployment site for AI-powered humanoid robots.
Rivian is also contending with a more skeptical tone around cash burn, after Jim Cramer said he’s not recommending the stock because it’s "losing too much money," even as Needham reiterated a Buy and kept a $23 target on June 10.
In the background, Tesla remains the key benchmark for factory-automation narratives, with its Optimus effort moving toward a 50,000-unit target by year-end after mass production began in January 2026.
RIVN: Key Technical Levels To WatchAt $15.67, Rivian is trading 2.9% below its 20-day SMA ($16.12), but it’s essentially sitting on its 50-day SMA ($15.65) and still 1.3% above its 100-day SMA ($15.46), which keeps price in a tight consolidation zone rather than a clean trend. The longer-term picture remains conflicted because the death cross from May (50-day below the 200-day) is still in place, even as the 20-day SMA is above the 50-day SMA (a shorter-term bullish crossover).
For momentum, RSI is the cleaner read here: the stock’s prior RSI extremes (oversold in January and overbought in June) frame the current tape as more "middle of the range" than stretched. RSI is a quick way to gauge whether a move is getting overheated or washed out, and a neutral setup typically puts more weight on whether price can reclaim nearby levels rather than expecting an immediate breakout.
From a levels standpoint, traders will likely watch whether the stock can stabilize back above the 20-day average area, or whether it starts leaning into the lower end of its recent range.
Key Resistance: $18.00 — a round-number area where rebounds can stall Key Support: $14.50 — a nearby floor just below current price where buyers previously stepped in What Is Rivian Automotive and Its Business Model?Rivian is a battery electric vehicle automaker selling vehicles in the US and Canada, with a lineup that includes a luxury truck, a full-size SUV, and a delivery van. The company delivered over 42,000 vehicles in 2025 and plans to begin selling a midsize SUV in 2026.
It also develops electronic control units and related software for autos in a joint venture with Volkswagen, and it’s building autonomous driving software intended for its vehicles and for robotaxis on the Uber ride-hailing network. The robotics angle fits into the same investor debate: whether automation and software can become real margin levers while EV demand and pricing stay competitive.
RIVN Stock Price Activity UpdateRIVN Stock Price Activity: Rivian Automotive shares were down 7.20% at $15.33 at the time of publication on Monday, according to Benzinga Pro data.
Image: Shutterstock
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Rivian stands out as a differentiated EV play amid a top-heavy S&P 500 and AI-driven market. RIVN's recent launch of the midsize R2 platform marks a pivotal 'Model 3' moment, targeting mass-market adoption with a ~50% reduction in BOM costs. The company's latest quarterly results showcase an ever-increasing pile of software revenue, which will further RIVN's push toward gross margin profitability.
Rivian Automotive (RIVN - Free Report) closed at $15.11 in the latest trading session, marking a -8.57% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.37%. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq lost 1.33%.
The stock of a manufacturer of motor vehicles and passenger cars has risen by 16.17% in the past month, leading the Auto-Tires-Trucks sector's gain of 0.49% and the S&P 500's gain of 2.02%.
Market participants will be closely following the financial results of Rivian Automotive in its upcoming release. The company is predicted to post an EPS of -$0.66, indicating a 17.5% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $1.44 billion, indicating a 10.34% upward movement from the same quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of -$2.41 per share and revenue of $7.02 billion. These totals would mark changes of +1.63% and +30.33%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Rivian Automotive. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, Rivian Automotive possesses a Zacks Rank of #3 (Hold).
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 35% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
The Rivian electric vehicle logo is displayed outside the company's Venice Hub space in the Venice Beach neighborhood of Los Angeles, California on June 17, 2026. (Photo by Patrick T. Fallon / AFP via Getty Images)
AFP via Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
The electric vehicle manufacturer presents an exciting new model and a substantial amount of cash to support its future, but the journey to becoming profitable is fraught with immediate losses and considerable execution risks.
After a 28.1% increase within a month, Rivian Automotive (RIVN) stock may seem like a company on the rebound. However, the situation is more intricate. The company recently marked the commencement of production for its R2, the more compact and affordable SUV that it believes will serve as a “game changer” for its long-term expansion. This marks a transformative moment. Rivian is no longer exclusively producing high-end electric trucks and vans; it is striving to become a manufacturer for the mass market. The stock, still trading roughly 26% below its highest point in the past 52 weeks, directly prompts a question for you as an investor: are you investing in a thoroughly funded, rapidly growing narrative at a pivotal juncture, or are you compensating for a strategy that faces several years of cash depletion and operational challenges?
The Cost Of OwnershipPurchasing Rivian stock at present means investing a small premium for its anticipated future rather than its current status. The stock is trading at a price-to-sales ratio of 3.7, slightly higher than the broader S&P 500's 3.2. This valuation relates to a company experiencing revenue growth at an impressive average annual rate of 44.9% over the past three years, significantly surpassing the market's rate of 5.8%. However, such growth entails substantial costs. The firm’s operating margin stands at a deeply negative -68.9%, in contrast with the average S&P 500 company’s positive 18.4%. With ongoing negative free cash flow, traditional earnings metrics do not apply. The market is effectively overlooking current losses, banking on the R2 launch to eventually provide the scale necessary to boost those margins into positive territory.
The Underlying BusinessThe valuation offers a glimpse into a company undergoing a critical transition. The entire investment thesis now revolves around the effective ramp-up of the new R2 vehicle. Management asserts that this is the juncture where the financial forecast shifts, claiming that for the R2, the “bill of materials is projected to be about half of our R1 platform.” They also expect reductions in other production expenses of “more than 50%.” This forms the crux of the strategy aimed at achieving profitability. Although the automotive segment reported a gross profit loss of $62 million last quarter, the company anticipates exiting 2026 with a “trajectory of positive automotive gross profit.”
However, proceed with caution, as the road ahead is expected to be tumultuous. Management has stated that “the complexity of launching a new vehicle will adversely affect our automotive gross profit in the second and third quarters.” Nonetheless, a silver lining is found in the Software and Services segment, which achieved $473 million in revenue last quarter, a 49% increase year-over-year, indicating potential for high-margin, recurring revenue streams.
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Strong Enough To Sustain Its Operations Without Depleting Cash?For a firm investing this significantly, the balance sheet is crucial. Rivian appears to have established a robust financial foundation to support its plans. It concluded the last quarter with around $4.8 billion in cash and short-term investments. More crucially, it has secured substantial upcoming funding. In 2026 alone, the company anticipates acquiring a total of “$2.55 billion in capital from our strategic partners,” including Volkswagen and Uber. Furthermore, it has an arrangement for an “up to $4.5 billion DOE loan” to finance its substantial new manufacturing facility in Georgia. As a result, the company’s total liquidity and projected capital for 2026 reaches nearly $8 billion. While its debt as a percentage of market value exceeds the average market rate, at 32.4% against 21.4%, this considerable liquidity is intended to sustain the company until its operations, as management describes them, can become “free cash flow positive in the future.”
Withstanding PressureA plan is essential; however, how a stock performs during adverse conditions is imperative too. Rivian’s history in this regard suggests caution. This is not a stock that remains stable during market turbulence. Throughout the inflation surge in 2022, RIVN stock plummeted 93%, which is a significantly sharper decline than the S&P 500’s 25% drop. As per the most recent data, it has yet to reclaim its pre-crisis peak. This history implies that in a widespread market downturn, Rivian is likely to perform considerably worse than the average stock. The options market concurs with the expectation of large fluctuations. It currently indicates an implied volatility of 64, placing it in the 71st percentile of its range over the past year, suggesting that traders are preparing for ongoing volatility.
Evaluating Your OptionsWhat criteria should you use to evaluate a stock like Rivian? The rationale for purchasing rests on the trust that the R2 serves as the catalyst for unlocking a profitable future. You are wagering on a substantial decrease in costs, a successful increase in production, and a brand potent enough to capture a notable share of the mainstream EV market. Additionally, you are investing in a company that has established a substantial financial buffer to navigate the unavoidable challenges of scaling operations. The collaborations with industry leaders such as Volkswagen and Uber, alongside government support, offer a significant safety net.
The reasons for exercising caution are equally tangible. The company is explicitly cautioning you to expect financial difficulties in the upcoming two quarters as it rolls out the R2. The execution risk is considerable. Scaling up a new vehicle is one of the most challenging tasks in manufacturing, and any setbacks could be expensive. As its past illustrates, if the overall market declines, this stock may experience a sharp downturn. The crucial question is whether Rivian can convert its ambitious, well-financed strategy into a profitable outcome. The key indicators to monitor are straightforward: the R2 delivery figures as they ramp up in the latter half of the year, and whether the company can achieve its target of positive automotive gross profit by the end of 2026.
Tesla (NASDAQ:TSLA | TSLA Price Prediction) stock is having a difficult session, falling 5% to $383 even as other electric vehicle (EV) names are showing far more resilience. Meanwhile, Lucid Group (NASDAQ:LCID) stock is up 1% to $5.22, and Rivian Automotive (NASDAQ:RIVN) stock is down just 1% to $14.99.
The divergence is notable because Tesla often serves as a bellwether for the broader EV sector. Yet, today’s trading action suggests investors may be reacting to factors that are more specific to Tesla stock than to electric vehicle stocks as a whole.
At the same time, Tesla continues to generate positive business headlines. For instance, Tesla recently announced a major battery storage partnership in Europe, underscoring the contrast between the company’s long-term growth initiatives and the stock’s short-term weakness.
Tesla Stock Takes the Brunt of the Selling Tesla stock appears to be absorbing the majority of the pressure hitting EV stocks today. While broader market weakness may be contributing to the decline, Tesla stock is falling much more sharply than either Lucid stock or Rivian stock.
Part of the explanation may be Tesla’s size and visibility within the market. When growth-oriented technology stocks come under pressure, Tesla stock often becomes a target for investors seeking to reduce their exposure to high-profile names.
Tesla stock has also remained under heightened scrutiny following recent debates about valuation, profitability, and future growth expectations. As a result, even modest shifts in market sentiment can have an outsized effect on Tesla shares.
Tesla’s Battery Storage Business Continues to Expand Despite today’s decline, Tesla continues to make progress on the operational front. Tesla has entered a multi-year partnership with NatPower that aims to deploy more than 25 gigawatt-hours of battery storage across Europe, with a long-term goal of reaching 100 gigawatt-hours.
According to projections associated with the initiative, the partnership could generate more than $15 billion in revenue over a 20-year period. Tesla’s energy business has increasingly become an important part of the company’s long-term growth story.
For Tesla, the agreement highlights an opportunity that extends beyond electric vehicles. The company’s battery storage operations give Tesla exposure to growing demand for energy infrastructure and grid modernization.
Why Lucid and Rivian Are Holding Up Better Lucid stock and Rivian stock aren’t exactly surging today, but both are performing substantially better than Tesla stock. That relative strength suggests investors are not broadly abandoning EV stocks.
Lucid and Rivian may attract a different investor audience than Tesla. While both companies face their own challenges, neither Lucid nor Rivian carries the same market influence or valuation expectations as Tesla.
Undeniably, Tesla remains a dominant force in the EV industry by scale, production volume, and brand recognition. That leadership position can create significant upside when sentiment improves, but it can also amplify downside volatility during market pullbacks.
A Test of Sentiment for EV Stocks Today’s trading action may ultimately prove to be more about market sentiment than company fundamentals. Tesla’s new battery storage partnership would ordinarily be viewed as a constructive development for the business.
Investors can watch for whether Tesla stock stabilizes as broader market conditions improve. Traders might also take note if the market begins assigning greater value to Tesla’s growing energy-storage operations alongside its vehicle business.
The bulls can point to Tesla’s expanding energy segment, industry leadership, and ability to pursue large-scale infrastructure opportunities. On the other hand, the bears can point to valuation concerns and the stock’s sensitivity to shifts in market sentiment.
For now, Tesla’s latest decline appears to be a reminder that even strong business developments don’t always translate into immediate gains for a stock. Wary investors might consider keeping their position sizes moderate while monitoring whether Tesla’s operational progress eventually gains greater recognition in the market.
Transformative acquisition of a rapidly growing market leader of large-scale zero-emission hydrogen-based stationary power solutions Expands Ballard's business model to include an energy-as-a-service solution with a bundled offering combining hydrogen production, distribution, logistics, refueling, fuel cells, and stationary power generation to drive higher revenue per megawatt and highly recurring revenue potential Builds upon a longstanding and proven partnership with GeoPura, where Ballard supplies fuel cell engines to GeoPura's Hydrogen Power Units Expands addressable market into high-growth end-markets in a capitally efficient manner, supported by secured hydrogen supply and government policy backing Maintains Ballard's path to profitability by 2028, unlocking US$25 million in annual run-rate EBITDA synergies , /PRNewswire/ - Ballard Power Systems Inc. (NASDAQ: BLDP) (TSX: BLDP) ("Ballard", the "Company"), a global leader in hydrogen fuel cell technology, today announced that it has entered into a definitive agreement (the "Agreement") to acquire GeoPura Limited ("GeoPura"), a zero-emission hydrogen-based power solutions provider (the "Transaction"). The Transaction consists of an upfront equity purchase price of £275.0 million ("Upfront Consideration"), funded through a combination of £82.5 million in Ballard cash on hand and the issuance of ~50.8 million Ballard common shares to GeoPura shareholders, at US$5.02 per share, based on Ballard's 30-day volume-weighted average share price. In addition to the Upfront Consideration, Ballard will pay contingent consideration of up to £27.5 million if GeoPura achieves certain specified financial milestones after closing of the Transaction. The total transaction enterprise value1, including assumption of GeoPura net debt and excluding contingent consideration, is £301.1 million (~US$400 million).
GeoPura CEO Andrew Cunningham (left) and CTO Theo Elmer (right) in front of an HPU-2 500kW system containing Ballard Fuel Cell Engines. (CNW Group/Ballard Power Systems Inc.) The Transaction represents a transformative acquisition that establishes Ballard as a vertically integrated and capitally efficient energy-as-a-service ("EaaS") provider with end-to-end capabilities spanning hydrogen production, distribution, logistics, refueling, fuel cells, and high-performance stationary power solutions.
Founded in 2019 and headquartered in the United Kingdom, GeoPura has built a rapidly growing business focused on developing, leasing and selling Hydrogen Power Units ("HPUs") and hydrogen fuel supplied through its three production sites, including a 50% ownership interest in UK-based HyMarnham Power. The combined HPU and fuel offering delivers a competitive, grid-independent power solution with high reliability, instant-on responsiveness, low noise, and zero-emissions across a variety of end-markets. GeoPura's broad customer base includes Aggreko, Balfour Beatty, BBC, Disney, Equinix, Microsoft, Netflix, Sunbelt Rentals, UK Ministry of Defence, and others.
The Transaction builds on a proven Ballard-GeoPura partnership and strong strategic alignment. GeoPura's UK-developed technology and British manufacturing complement Ballard's Canadian fuel cell expertise, creating a platform grounded in shared values, common history, and a commitment to reliable, zero-emission power. This Canadian-British combination supports global expansion by pairing GeoPura's hydrogen ecosystem with Ballard's world-class fuel cell platform to deliver a bundled customer offering and unlock meaningful efficiencies for existing and future customers.
MANAGEMENT REMARKS
Marty Neese, President and Chief Executive Officer of Ballard, commented, "This is a truly transformative acquisition that establishes Ballard as a leading, fully integrated hydrogen ecosystem provider and positions us to capitalize on the accelerating global energy transition and increasing demand for energy resilience. GeoPura's exceptional team has built a best-in-class hydrogen power solutions business with reliable technology, blue-chip customer relationships, and an attractive growth trajectory. By combining Ballard's world-class fuel cell technology with GeoPura's energy-as-a-service business model, we create a Company well-positioned to serve end-markets demanding secure, reliable, low noise, and emissions free power for their mission-critical applications. This acquisition significantly accelerates our revenue growth, shifts our business toward recurring, high-margin revenues and reinforces our path to profitability by 2028. We're excited to welcome the GeoPura team to Ballard and to execute on the significant opportunities ahead."
Andrew Cunningham, Founder and Chief Executive Officer of GeoPura, commented, "When your work powers film and live television, hospitals, defence, essential infrastructure, and construction with reliable off-grid and grid-support systems, your engine supplier is central to your success. For GeoPura, Ballard has stood head and shoulders above the rest. They are the only partner able to deliver the fuel cell capabilities we need, backed by the deep engineering expertise required to ensure unbeatable product quality from kilowatt to megawatt. I am incredibly excited to combine GeoPura's high-performance capabilities with Ballard's product excellence, giving customers worldwide the best value from our fully integrated energy-as-a-service offering."
GeoPura Chairman, Lord Richard Harrington, former Business and Industry Minister and Chair of Make UK said, "Ballard's investment reflects its confidence in a UK manufacturing business using UK technology that will now be exported around the world. I am excited by the company's global expansion plans and look forward to supporting them on this journey."
COMPELLING STRATEGIC RATIONALE
Building an Ecosystem with a Bundled Offering: By combining Ballard's fuel cell technology with GeoPura's integrated hydrogen production, logistics, and stationary power capabilities, the Company maximizes revenue per megawatt through multiple customer touchpoints. This results in a significant increase in lifetime value capture of each megawatt deployed. Access to Stationary Power Market with Proven Product Portfolio: Establishes Ballard's entry into the high-growth stationary power market with an immediately deployable and proven hydrogen genset product suite delivering "six nines" reliability (99.9999% uptime) and well-established customer base. GeoPura's HPUs serve construction, film and television, events, transportation, healthcare, defence, and potentially the rapidly expanding data centre applications, positioning Ballard to capture these growing markets globally. Accelerating Growth and Profitability: GeoPura's business model generates recurring revenues from HPU leasing with hydrogen supply and logistics, alongside HPU and hydrogen sales. GeoPura expects 2026 revenue to be approximately £38 million. Together with Ballard, the large total addressable market and secular tailwinds reshape Ballard's financial profile into an EaaS operator with accelerated growth and a clearer pathway to Ballard's 2028 profitability target. Unlocking Total Addressable Market Growth with Supportive Policy Environment: GeoPura's stationary power platform expands Ballard's addressable market beyond mobility and into high-growth end-markets where HPUs serve as mission-critical power infrastructure. GeoPura also holds the UK government's inaugural Hydrogen Allocation Round 1 (HAR1) contract, a subsidy mechanism guaranteeing hydrogen production revenues over fifteen years, providing substantial revenue visibility. This policy support, combined with GeoPura's 50% ownership of the HyMarnham hydrogen production facility and its capitally efficient expansion capacity, uniquely positions Ballard to expand its market reach and capitalize on accelerating decarbonization mandates and critical power demands globally. Highly Synergistic: The longstanding Ballard-GeoPura technology partnership provides a proven foundation upon which to grow the business and integrate the two highly complementary teams. Ballard will achieve structural cost advantages that enhance competitive positioning while creating demand pull-through within HPU end-markets. Approximately US$25 million in high-confidence run-rate EBITDA synergies have been identified, driven by revenue expansion and cost optimization. GeoPura's experienced management team strengthens execution and accelerates value realization. TRANSACTION TERMS AND FINANCING DETAILS
Under the terms of the Agreement, Ballard will acquire 100% of GeoPura, including GeoPura's 50% ownership in HyMarnham Power, for total Upfront Consideration of £275.0 million. The Upfront Consideration will be funded with £82.5 million in Ballard cash on hand, with the remainder to be funded through newly issued Ballard common shares provided to GeoPura shareholders, thereby maintaining Ballard's strong balance sheet. The number of Ballard shares to be issued to GeoPura shareholders is ~50.8 million, calculated based on a 30-day volume-weighted average price of Ballard common shares preceding announcement of the Transaction. Upon closing of the Transaction, GeoPura shareholders are expected to own approximately 14.4% of Ballard on a pro-forma basis. GeoPura shareholders will also enter into customary lock-up agreements restricting the sale or transfer of their Ballard common shares for a specified period following the closing of the Transaction.
In addition to the Upfront Consideration, Ballard will pay contingent consideration of up to £27.5 million if GeoPura achieves certain financial milestones after closing of the Transaction.
The total transaction enterprise value1, including assumption of GeoPura net debt and excluding contingent consideration, is £301.1 million (~US$400 million).
ADDITIONAL DETAILS AND CLOSING
Following completion of the Transaction, GeoPura's Founder and Chief Executive Officer, Andrew Cunningham, is expected to assume the role of President of Ballard, reporting to Marty Neese, as Ballard's Chief Executive Officer. Additionally, Ballard expects to include Andrew Cunningham and Lord Richard Harrington, current Chairman of GeoPura, as nominees to its Board of Directors, designated by GeoPura shareholders.
The Transaction has been unanimously approved by the Board of Directors of both Ballard and GeoPura and is subject to customary closing conditions for a transaction of this nature, including UK National Security and Investment Act filing and the approval of the TSX for the issuance of the Ballard common shares pursuant to the Transaction. The Transaction is expected to close in the second half of 2026.
ADVISORS
RBC Capital Markets is serving as exclusive financial advisor to Ballard. Ashurst LLP and Stikeman Elliott LLP are serving as legal counsel to Ballard.
Barclays is serving as exclusive financial advisor to GeoPura and Winston Taylor LLP is serving as legal counsel to GeoPura.
CONFERENCE CALL AND WEBCAST
Ballard will host a webcast June 23, 2026 at 11:00am E.T. to discuss the Transaction. Marty Neese, President and Chief Executive Officer of Ballard, Kate Igbalode, Senior Vice President and Chief Financial Officer of Ballard, and Andrew Cunningham, Founder and Chief Executive Officer of GeoPura, will present on the webcast. The live call can be accessed by dialing +1-833-821-2814 (Canada/US toll free). Alternatively, a live webcast can be accessed through a link on Ballard's homepage (www.ballard.com) or the following link: Announcement Conference Call
About Ballard Power Systems
Ballard Power Systems' (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, and stationary power. To learn more about Ballard, please visit www.ballard.com.
Cautionary Statements Regarding Forward-Looking Information
This press release contains certain information that may constitute "forward-looking information" within the meaning of applicable Canadian Securities laws and "forward-looking statements" within the meaning of applicable U.S. securities laws (together, "forward-looking statements"). Often, but not always, forward-looking statements can generally be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding the Transaction, its terms and completion thereof, the benefits of the Transaction to Ballard shareholders and other stakeholders, plans, strategies and objectives of management and expected costs or production outputs. There can be no assurances that the Transaction will be completed on the terms set out in this press release or at all. Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, receipt of necessary regulatory approvals of the Transaction, foreign exchange rate fluctuations, general economic conditions, increased costs, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions, recruitment and retention of personnel and potential litigation. Forward-looking statements are based on the Company's and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward-looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or its management or beyond the Company's control. Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward-looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements in this press release speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward-looking statements or to advise of any change in events, conditions or circumstances.
Contact Information
Sumit Kundu – Investor Relations, +1.604.360.9714 or [email protected]
1Including assumption of 50% of the debt associated with the HyMarnham joint venture.
Robinhood (HOOD) received a big price-target hike from a Wall Street firm a day after revealing hefty job cuts. Robinhood stock soared above a long-term level for the first time in months.
On Wednesday, Argus analyst Stephen Biggar raised his price target on HOOD stock by 22% to $110, according to TheFly.com. Biggar kept a buy rating on shares a day after Robinhood announced a 10% workforce reduction. Additionally, analysts at Deutsche Bank on Wednesday raised the price target on Robinhood stock by $2 to $105.
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Robinhood Layoffs Spark Hikes For HOOD Stock On Tuesday, Robinhood filed a Form 8-K disclosing it's firing roughly 290 staffers. The firm said it is "taking this action from a position of business strength, including June month-to-date average daily trading volumes at record levels across equities, options, and prediction markets." Robinhood added it will close "a small number of open roles" as well.
Simultaneously, Robinhood warned of a roughly $28 million charge against Q2 earnings, tied to restructuring and severance costs.
But Wall Street firms raised price targets on Wednesday as they factored annual compensation savings into their financial models. Corporate layoffs often reflect a financial weakening in a company, but Robinhood claims the opposite is true in this case.
Robinhood Stock Makes Bullish Move Shares of the popular zero-fee trading app soared 8.8%, closing above 105 on the stock market today. Robinhood stock punched above resistance at its 200-day moving average in big volume, clearing that key level for the first time since January, the MarketSurge charts show.
The cuts announced this week marked Robinhood's first major layoffs in three years.
The financial technology company cited the need to remain "lean and disciplined." Management refrained from tying the job cuts to artificial intelligence, as other companies have done in recent months.
A week ago, HOOD stock popped on the firm's entry into the IPO underwriting business.
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Futures Rise After Fed-Led Tumble; SpaceX Falls As Robinhood Jumps
Shares of Robinhood (NASDAQ:HOOD | HOOD Price Prediction) are surging in midday trading on Wednesday, June 17, with the stock up 12% to roughly $109. The retail-brokerage leader is rallying on a combination of cost discipline and a continued tape of record customer activity.
The catalyst: a significant workforce reduction aimed at streamlining the business, even as Robinhood logs record-breaking volumes across equities, options, and prediction markets. A Reddit post in r/stocks captured the mood early, titled “HOOD just cut 10% of its staff into a stock near my fair value.”
Peer Webull (NASDAQ:BULL) stock is moving in sympathy, climbing 8% to around $7.26. There’s no Webull-specific news driving the move, just sector enthusiasm pulling the other online broker higher.
Workforce Cut Meets Record Trading Volumes Investors are rewarding Robinhood’s efficiency push. The restructuring reportedly trims about 10% of jobs, yet management says it plans to keep investing in technology and top talent to sustain growth.
The backdrop helps. In Q1 2026, Robinhood’s equity notional trading volumes climbed 54% YoY to $638 billion, the margin book hit a record $17 billion, and event contracts traded reached a record 8.8 billion. Moreover, Robinhood’s net deposits of $17.7 billion ran at a 22% annualized growth rate.
CEO Vlad Tenev framed the strategy on the last call, asserting, “Driven by our relentless product velocity and innovation, Robinhood is increasingly positioned at the center of our customers’ financial lives, just as we enter the early innings of the Great Wealth Transfer.” Cutting headcount while volumes surge is the kind of operating leverage story the market typically pays up for.
Deutsche Bank Lifts Target, But Shares Trade Above It Wall Street’s support added fuel to the rally. For instance, Deutsche Bank raised its price target on Robinhood to $105, citing the company’s strong market position and product innovation (though HOOD stock is already trading near $109, so the raised target sits below the current share price).
The broader analyst panel is constructive. Alpha Vantage data shows 4 Strong Buy, 16 Buy, 4 Hold, and 3 Sell ratings, with a consensus target of $100.86. Robinhood stock carries a forward P/E ratio of 50x and a beta of 2.3, underscoring just how volatile this name can be.
Prediction market traders are leaning in. On Polymarket, the intraday “HOOD Up or Down on June 17” market is pricing a 99% probability of a green close today. The weekly market pegs $110 as the dominant outcome through expiration on June 19.
Webull Rides the Sector Wave Webull stock is the clear sympathy beneficiary. The stock remains down 30% over the past year, reflecting how volatile this small-cap broker has been.
Webull’s own fundamentals support the narrative. Q1 2026 revenue of $160 million grew 36% YoY, equity notional volume jumped 104% YoY to $261 billion, and daily average revenue trades (DARTs) hit an all-time high of 1.3 million. Webull CEO Anthony Denier stated, “The demand from sophisticated, self-directed investors, including institutional and B2B clients, has never been greater.”
A regulatory tailwind sits in the background, too. The FINRA Pattern Day Trader rule change, effective June 4, is widely viewed as supportive for active-trading platforms like Webull and Robinhood.
What to Watch Now HOOD stock and BULL stock have shown a tendency to swing hard on volume. Robinhood shares are now trading above the $100.86 consensus target and the $80.83 50-day moving average, so any follow-through could face resistance.
Robinhood’s bull case rests on cost discipline plus record activity equaling expanded operating leverage. The bear case, voiced in r/WallStreetBets and r/options threads earlier today, questions whether the workforce cut signals cooling momentum rather than confident scaling. Both interpretations are defensible.
Investors may want to keep their position sizes modest given the volatility profile here. Watch for whether HOOD holds above $105 and whether Webull stock can sustain its sympathy bid once Robinhood’s tape stabilizes.
Robinhood Markets (HOOD 0.69%), a commission-free retail brokerage and multi-asset investing platform, closed at $105.20, up 8.78%. On Wednesday, the company announced a planned 10% workforce reduction and record June month-to-date volumes, prompting analysts to raise price targets. Trading volume reached 69.9M shares, coming in about 128% above its three-month average of 30.6M shares. Robinhood Markets IPO'd in 2021 and has grown 202% since going public.
How the markets moved todayThe S&P 500 fell 1.19% to 7,422, while the Nasdaq Composite dropped 1.34% to 26,022. Among retail brokerage and fintech financial services peers, Interactive Brokers Group rose 2.14% to $95.09, while The Charles Schwab added 0.90% to $94.51, highlighting a mixed session for brokerage names.
What this means for investorsOn Wednesday, Robinhood announced it would reduce its headcount by 10%, stating that it “is taking this action from a position of strength.” The company went on to report that June month-to-date volumes were at record levels across equities, options, and prediction markets, lending credence to the notion that the workforce reduction isn’t necessarily a reactive move but rather a proactive one.
Following these news items, an analyst at Argus raised their price target on Robinhood from $90 to $110, while a couple of other investment firms also inched their price targets higher. While HOOD stock trades at a slightly lofty 52 times forward earnings, it grew sales by 15% and Gold subscribers by 34% in its latest quarter. Immensely popular among younger generations, Robinhood could be a great investment if it can grow alongside its young user base.
Charles Schwab is an advertising partner of Motley Fool Money. Josh Kohn-Lindquist has positions in Robinhood Markets. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends Charles Schwab and recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group, short January 2027 $46.25 calls on Interactive Brokers Group, and short June 2026 $97.50 calls on Charles Schwab. The Motley Fool has a disclosure policy.
An article concerning a development that could benefit Robinhood Markets (HOOD 0.69%) helped boost the price of the next-generation brokerage on Wednesday. Investors took the report as excellent news for the financial services company and reacted by pushing its shares up almost 9%.
The digital future Well before market open, Reuters reported that the Securities and Exchange Commission (SEC) is preparing a policy allowing cryptocurrency companies to transact in crypto products such as tokenized stocks.
Image source: Getty Images.
Citing unnamed "analysts and lawyers," the news agency added that SEC chair Paul Atkins will formally announce the policy in the near future. Tokenized stocks, which are digital assets that sit on blockchains and are tied to actual shares of companies, can be traded outside of market hours and settled near-instantaneously, among other advantages over traditional equity transacting.
Atkins has proposed an "innovation exemption" framework under which the intermediaries typical in securities trading can be bypassed under certain circumstances. This would allow for that direct and immediate transacting promised by tokenized stocks.
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Waiting for the green light Unlike some of the more established brokerages, Robinhood began embracing crypto trading years ago. It's very much a tech-forward company, to the point where it already operates a trading platform for tokenized stocks. Unfortunately for enthusiasts of such products in the U.S., this isn't fully legal in the U.S.; this service is only available for European Union (EU) clients.
At least, not yet. Should that change, as per the Reuters report, Robinhood would undoubtedly score a win. I don't blame investors for piling into the stock on that possibility.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Robinhood Markets (HOOD 0.69%) was one of five brokerages chosen to offer Space Exploration Technologies (SpaceX) in its record-shattering initial public offering (IPO) last week. Robinhood stock is 36% off its highs, but it's up more than 6% since the IPO. Can SpaceX breathe new life into Robinhood stock?
What SpaceX IPO access does for Robinhood Robinhood was the original fee-free trading app, setting a trend for the broader investing community. It's been at the forefront of fintech innovation, helping to level the playing field for retail investors and providing access to different types of instruments that are usually left to institutional investors.
It's not surprising that it offers IPO access, another area where retail investors have historically been left out while early investors took home gains. And unlike other brokerages that offer IPO access, it doesn't require a minimum balance or net worth.
Image source: Getty Images.
Offering access to the SpaceX IPO is a natural progression for Robinhood, and it may have onboarded new investors to its platform who were interested in taking part. Having this new cadre of users gives Robinhood the opportunity to convert them into engaged members who adopt other products as well.
It's more than SpaceX SpaceX stock offers value to Robinhood, but there's still a lot more going on. The main reason Robinhood stock is down is that it's highly correlated with cryptocurrency, which plays a large role in its growth -- or decline. Bitcoin (BTC 4.15%) is down 38% over the past year, and Robinhood's cryptocurrency revenue fell 47% from last year in the first quarter.
It also has several other risky businesses, including options trading and prediction markets. Prediction markets revenue increased 320% in the first quarter, but like cryptocurrency, that could be highly volatile.
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The company has also been moving into more typical financial services, like credit cards and bank accounts. More recently, Robinhood received approval to underwrite stocks, which is a huge step for the trading platform. Underwriting is the domain of investment banks, and Robinhood has huge ambitions to expand into all sorts of directions. Investment banks play an important role in markets, which provides Robinhood with greater stability.
The long-term play The SpaceX IPO won't be enough to rescue Robinhood stock, but the innovative force behind it makes it a stock worth considering. If the platform expands enough that the more stable products offset the risk of the other products, it could be a formidable player on the fintech scene over the long term.
It's not the right fit for the conservative investor, or even most investors, but if you have a high risk tolerance and a long time horizon, a small position in Robinhood stock is reasonable.
At last check, Bitcoin traded around $64,200, down about 1.9% over 24 hours, with the world's largest cryptocurrency still nearly 49% below its all-time high of $126,198.07.
According to Benzinga Edge Stock Rankings, BitMine Immersion Technologies posted a week-on-week jump in its momentum score from 80.29 to 91.08. The stock was down 42.17% year-to-date, 20.99% over the month, but it gained 225.73% over the last year.
Meanwhile, Galaxy Digital’s momentum score rose from 86.71 to 90.87, despite having a poor growth score. The stock was 47.76% higher YTD, 11.58% over the month, and 78.69% over the year.
Robinhood Markets Inc. (NASDAQ:HOOD), another crypto-adjacent stock tied to retail trading activity, also showed strength with a momentum score of 75.60, rising from a mere 20.55 score.
It maintained a strong price trend in the short and medium terms but a weak trend in the long term. The stock was down 6.98% YTD, but up 36.38% and 40.36% over the month and the year, respectively.
The momentum score measures a stock's relative strength based on price movement patterns and volatility across multiple timeframes. In this case, the ranking suggests crypto-linked equities are outperforming the token that often drives sentiment across the group.
Bitcoin Stays Under PressureThe divergence comes as crypto markets remain fragile following the Federal Reserve's latest policy decision and the U.S.-Iran peace agreement.
According to Santiment, the Fed decision became a classic "buy the rumor, sell the news" moment, with investors shifting attention "from what was expected to what comes next."
Analysts See Fragile RecoveryCryptoQuant said Bitcoin's short-term holder ‘Spent Output Profit Ratio’ has not yet broken into panic territory.
"The current structure suggests a fragile recovery phase rather than full capitulation; a reclaim of 1.0 would confirm improving short-term sentiment, while a renewed drop below 0.95 would signal rising panic risk," CryptoQuant said.
Meanwhile, Anthony Scaramucci remained bullish on Bitcoin's longer-term setup, saying, "I think Bitcoin starts to rally late in the 4th quarter of 2026 into early 2027."
For now, Bitcoin is struggling. But BMNR and GLXY are showing that crypto-adjacent momentum has not disappeared.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Robinhood Markets (HOOD) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might help the stock continue moving higher in the near term.
In the market, if there aren't enough sell orders to fill all the buy orders, the buyers are forced to outbid each other and pay premiums if they want to acquire shares. This forces the stock into an uptrend.
When the uptrend reaches a resistance level, the tide turns. There is a large amount of supply or sell orders at these levels. Buyers can buy as many shares as they want to without pushing the price higher.
Robinhood Hits ResistanceRallies end or pause when they reach resistance levels. As you can see on the chart below, Robinhood hit resistance around the $105 level yesterday.
It isn't a coincidence that there is resistance at this level. It was a support level in November, and levels that had previously been support can turn into resistance.
This is a common occurrence in the financial markets. It happens because of remorseful or regretful buyers.
People who purchased shares at around $105 in November realized their decision was a mistake when the support level broke. Some of them also decided to hold onto their losing positions, but they also decided to exit at breakeven if they could eventually do so.
When the shares rallied back to $105, these remorseful buyers placed sell orders. This resulted in resistance forming at the same price that had been supported.
If a stock eventually breaks or trades above the resistance, it can be a bullish dynamic. It shows that the sellers who created the resistance have left the market. They have canceled or finished their orders.
With this large amount of supply taken off the market, buyers will once again be forced to outbid each other to acquire shares. This dynamic could move Robinhood higher.
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In the latest trading session, Robinhood Markets, Inc. (HOOD - Free Report) closed at $108.15, marking a +2.8% move from the previous day. The stock's change was more than the S&P 500's daily gain of 1.09%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, added 1.91%.
Prior to today's trading, shares of the company had gained 38.86% outpaced the Finance sector's gain of 4.44% and the S&P 500's gain of 0.29%.
Investors will be eagerly watching for the performance of Robinhood Markets, Inc. in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.42, indicating constancy compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.19 billion, up 20.73% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.81 per share and a revenue of $4.96 billion, representing changes of -11.71% and +10.93%, respectively, from the prior year.
Any recent changes to analyst estimates for Robinhood Markets, Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.16% higher. Robinhood Markets, Inc. is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Robinhood Markets, Inc. is presently being traded at a Forward P/E ratio of 58.01. This valuation marks a premium compared to its industry average Forward P/E of 14.86.
We can also see that HOOD currently has a PEG ratio of 2.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Financial - Investment Bank industry was having an average PEG ratio of 1.1.
The Financial - Investment Bank industry is part of the Finance sector. With its current Zacks Industry Rank of 84, this industry ranks in the top 35% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Founded in 2013, Robinhood (HOOD 0.69%) changed the brokerage industry with its free trading model. Today, the broker's product lineup has expanded well beyond stocks to include products like cryptocurrencies and prediction markets. With a focus on smaller investors, Robinhood is living up to its goal to "democratize finance for all." But is becoming a full-service financial platform enough to make the stock a buy?
Robinhood is growing quickly Although it was founded in 2013, Robinhood didn't go public until 2021. In its first earnings release in the second quarter of that year, it had $102 billion in custody. In the first quarter of 2026, roughly five years later, that figure had grown to $307 billion, and it is now called total platform assets, given the broadening of the company's business. The company has rapidly become a major player in the finance industry, building off its early success in attracting younger traders interested in stocks.
Image source: Getty Images.
There's no question that management deserves a great deal of credit for what Robinhood has achieved. But that alone doesn't make the stock worth buying. Notably, Robinhood is being afforded a premium valuation, with a price-to-earnings ratio of 45x, compared to P/Es of 39x for Interactive Brokers (IBKR 1.35%) and 18x for Charles Schwab (SCHW +0.95%). A growth investor may be able to justify Robinhood's valuation, but a value investor likely wouldn't be interested.
What's going on with Robinhood's customer base? There's another issue to consider here as well. With a focus on new investors, Robinhood may be taking on more risk than its long-established peers, such as Charles Schwab. This potential risk was highlighted in Robinhood's solid first quarter 2026 results. Risk-taking is the big issue.
While Robinhood's transaction-based revenue jumped 7% year-over-year in the quarter, that growth was largely driven by prediction markets, which boosted "other" revenue by 320%. Cryptocurrency-related revenue, however, fell by 47%. This is notable because it suggests that aggressive investors shifted to what is the current hot trading idea.
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The problem is that Robinhood has never lived through a deep market downturn, such as the dot-com crash or the bear market associated with the Great Recession. Until it has, it is hard to know what its customers will do when every market seems to be heading lower, and losses are piling up. In other words, what will its customers do when there's no new hot investment idea to jump on? There is a very real possibility that fear drives less experienced investors to get out of the market and stay out. Risk-averse investors will likely want to wait for Robinhood to be stress-tested before buying it.
Robinhood is not a bad company, but it is still quite young None of this is meant to suggest that Robinhood is a bad company. It has done incredible things in a very short period of time. But that short period of time is a problem because the vast majority of it has been good for the stock market and investing. Robinhood's stock is expensive, and the company has yet to face a deep, prolonged market downturn. Only the most aggressive growth investors will likely be interested in it for now.
Charles Schwab is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends Charles Schwab and recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group, short January 2027 $46.25 calls on Interactive Brokers Group, and short June 2026 $97.50 calls on Charles Schwab. The Motley Fool has a disclosure policy.
Watch as the billionaire entrepreneur reveals the grueling series of “nos” he got while building Robinhood, what he bought to celebrate its IPO, and why his next big bet is on space.
June 22, 2026 07:00 ET | Source: Robinhood Markets, Inc.
Opportunistic capital raise with proceeds used to enhance strategic flexibility to invest for future growth
Approximately $300 million of the proceeds to be used to repurchase shares, although the amount of Class A common stock that Robinhood actually repurchases may be more or less than $300 million
Additionally, a portion of the proceeds to be used to purchase capped calls intended to offset any share dilution until at least a targeted 125% premium to the last reported sale price of Robinhood’s Class A common stock on the date of pricing
MENLO PARK, Calif., June 22, 2026 (GLOBE NEWSWIRE) -- Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today announced that, subject to market conditions, it intends to offer $2.0 billion in aggregate principal amount of convertible senior notes due 2029 (the “Notes”) in a private placement (the “Offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). Robinhood also intends to grant the initial purchasers of the Notes an option to purchase, for settlement within a 13-day period from, and including the date on which the Notes are first issued, up to an additional $200 million aggregate principal amount of Notes.
The Notes will be senior, unsecured obligations of Robinhood. Robinhood will settle conversions by paying cash up to the aggregate principal amount of the Notes to be converted and paying or delivering, as the case may be, cash, shares of Robinhood’s Class A common stock or a combination of cash and shares of Robinhood’s Class A common stock, at Robinhood’s election, in respect of the remainder, if any, of Robinhood’s conversion obligation in excess of the aggregate principal amount of the Notes being converted, based on the then applicable conversion rate. The Notes will mature on October 1, 2029, unless earlier converted, redeemed or repurchased.
Robinhood may not redeem the Notes prior to July 1, 2028, except in the event of a cleanup redemption (as defined below). Robinhood may redeem for cash all or any portion of the Notes (subject to certain limitations), at its option, on or after July 1, 2028 and prior to the 21st scheduled trading day immediately preceding October 1, 2029, if the last reported sale price of Robinhood’s Class A common stock has been at least 120% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Robinhood provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, the Notes will be redeemable at any time if the aggregate principal amount of the Notes that remains outstanding is less than $100 million and certain other conditions are satisfied (a “cleanup redemption”).
The interest rate, the initial conversion rate and certain other terms of the Notes will be determined at the time of pricing of the Offering.
Robinhood intends to use (i) approximately $300 million of the net proceeds from the Offering to repurchase its Class A common stock, although the amount of its Class A common stock that Robinhood actually repurchases may be more or less than $300 million, (ii) a portion of the net proceeds from the Offering to fund the costs of the capped call transactions described below and (iii) the remainder of the net proceeds from the Offering, if any, for general corporate purposes, which may include organic growth investments, potential acquisitions and/or capital expenditures. If the initial purchasers exercise their option to purchase additional Notes, Robinhood expects to use a portion of the net proceeds from the sale of the additional Notes to enter into additional capped call transactions. In addition, following the Offering, Robinhood plans to continue to repurchase additional shares of its Class A common stock pursuant to Robinhood’s stock repurchase program. The repurchases of Robinhood’s Class A common stock described above could increase (or reduce the size of any decrease in) the market price of Robinhood’s Class A common stock or the Notes. In the case of repurchases effected concurrently with the Offering, this activity could affect the market price of Robinhood’s Class A common stock prior to, concurrently with or shortly after the pricing of the Notes, and could result in a higher effective conversion price for the Notes.
In connection with the pricing of the Notes, Robinhood expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the Notes or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of Robinhood’s Class A common stock initially underlying the Notes sold in the Offering. The capped call transactions are expected generally to reduce potential dilution to Robinhood’s Class A common stock upon conversion of any Notes and/or offset any cash payments Robinhood is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
Robinhood has been advised that, as is customary for convertible note offerings that include capped call transactions, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Robinhood’s Class A common stock and/or enter into various derivative transactions with respect to Robinhood’s Class A common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Robinhood’s Class A common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Robinhood’s Class A common stock and/or purchasing or selling Robinhood’s Class A common stock or other securities of Robinhood in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so (x) during any observation period related to a conversion of Notes or following any repurchase of Notes in connection with any “fundamental change” (as defined in the indenture for the Notes) and (y) following any other repurchase of Notes if Robinhood elects to unwind a portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or decrease in the market price of Robinhood’s Class A common stock or the Notes, which could affect the ability of noteholders to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of Notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the Notes.
Neither the Notes nor the shares of Robinhood’s Class A common stock potentially issuable upon conversion of the Notes, if any, have been, or will be, registered under the Securities Act, the securities laws of any other jurisdiction or any state securities laws and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act. This news release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, the Notes, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale is unlawful. No assurance can be made that the Offering will be consummated on its proposed terms or at all.
This press release contains forward-looking statements regarding Robinhood and its consolidated subsidiaries (“we,” “Robinhood,” or the “Company”), including, but not limited to, statements regarding the anticipated terms of the Notes, the completion, timing and size of the Offering and capped call transactions, the anticipated effects of entering into the capped call transactions, and the intended use of the net proceeds from the Offering and the anticipated effects thereof. In some cases, you can identify forward-looking statements because they contain words such as “believe,” “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Our forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual future results, performance, or achievements to differ materially from any future results expressed or implied in this press release. Factors that contribute to the uncertain nature of our forward-looking statements include, among others, risks and uncertainties associated with market conditions, including market interest rates, the trading price and volatility of Robinhood's Class A common stock and risks related to this Offering, and Robinhood’s business and operations and results of operations. Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events. More information about potential risks and uncertainties that could affect our business and financial results can be found in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as well as in our other filings with the SEC, all of which are available on the SEC’s web site at www.sec.gov. Moreover, we operate in a very competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible for us to predict all risks nor identify all uncertainties. The events and circumstances reflected in our forward-looking statements might not be achieved and actual results could differ materially from those projected in the forward-looking statements. Except as otherwise noted, all forward-looking statements in this press release are made as of the date of this press release, June 22, 2026, and are based on information and estimates available to us at this time. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by law, Robinhood assumes no obligation to update any of the statements in this press release whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this press release with the understanding that our actual future results, performance, events, and circumstances might be materially different from what we expect.
Robinhood Markets Inc. (NASDAQ:HOOD) shares are trading lower Monday after the company announced a $2.0 billion convertible senior notes offering due 2029.
Robinhood Markets stock is under selling pressure. What’s pulling HOOD shares down? The OfferingRobinhood announced it intends to offer $2.0 billion in aggregate principal amount of convertible senior notes due October 1, 2029, in a private placement to qualified institutional buyers under Rule 144A. The initial purchasers have been granted an option to purchase up to an additional $200 million in notes, bringing the potential total to $2.2 billion.
The interest rate, initial conversion rate, and certain other terms will be determined at pricing. Robinhood may not redeem the notes prior to July 1, 2028, except under certain limited circumstances.
Use of ProceedsRobinhood Stock TumblesHOOD Price Action: At the time of publication, Robinhood shares are trading 1.92% lower at $106.07, according to data from Benzinga Pro.
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Analysts at Evercore ISI argue that Credo Technology (NASDAQ: CRDO | CRDO Price Prediction) could see further upside. The firm has a $325 price target, and noted that:
“Credo is viewed as a copper-based AI-connectivity play, largely because it created the [architecture, engineering and construction] interconnect standard and drove its success by delivering a reliable, systems solution – i.e., whole cable + chips instead of just chips. However, we believe it will be increasingly viewed as a broad copper + optical AI-connectivity play as it prosecutes its optical roadmap, which includes optical [digital signal processors], Silicon Photonics [integrated circuits], microLED cables, and most importantly its [ZeroFlap Optics] modules, where consistent with its AEC playbook,” as quoted by CNBC.
The stock is up another $12.85 in premarket, last trading at $284.68.
Futures are mixed this morning. The S&P 500 is down about 0.16%, or by 12 points. The SPDR S&P 500 ETF (SPY) is down by a few cents. The Dow is down about 0.04%, or by 22 points. The Nasdaq is up by 0.04%, or by about 13 points. Gold is up by $70.40 at $4,213.76. Bitcoin is up by $900.42 at $64,162.56. Oil prices are down another 53 cents to $75.32.
At the moment, markets are assessing the latest developments with Iran, with Qatar and Pakistan saying that the U.S. and Iran had agreed on a roadmap to a final deal in the next 60 days. That news sent oil prices down another 53 cents to $75.32.
Markets are also waiting on May’s reading on the personal expenditure price (PCE) index, which is closely watched by the Federal Reserve. Unfortunately, even if we exclude food and energy, core PCE is expected to rise from April. Plus, as noted by CNBC, “Following last week’s hawkish Fed meeting, expectations of an interest rate increase were pulled forward to as soon as October. Investors are now laser-focused on any inflation reading that could signal the U.S. central bank may soon begin hiking rates.”
Market Movers: Micron on the Move Ahead of Earnings Ahead of earnings on June 24, Micron (NASDAQ: MU) saw two price hikes. Bernstein raised its forecast to $1,300, while Needham hiked its outlook to $1,550.
Days ago, TD Cowen raised its price target on Micron to $1,500 from $660, with a buy rating. The firm cited strong demand for dynamic random-access memory (DRAM), which continues to outpace supply by a wide margin.
Fueled by surging demand for AI infrastructure, data centers, and high-bandwidth memory solutions, Micron has emerged as one of the semiconductor industry’s biggest winners. The company’s advanced DRAM and NAND memory products have become critical components in AI servers, helping drive significant revenue growth and investor enthusiasm.
Market Movers: Insider Buying at Robinhood When insiders buy shares of their own company, investors should take notice. After all, insider buying can be one of the strongest signals of management confidence.
Look at Robinhood (NASDAQ: HOOD), for example.
After dipping on Bitcoin-fueled weakness, HOOD is just starting to come back strong, especially with news that an insider bought more than 250,000 shares. In fact, according to a securities filing, director Meyer Malka bought 250,000 shares at prices ranging from $80.07 to $81. Two days before that, Malka picked up 181,000 shares for between $83.24 and $83.63 a share.
Robinhood Markets HOOD is moving to raise $2 billion through a private convertible senior notes offering due in 2029, tapping into a strong market for companies looking to build cash. The notes are expected to carry a 0% fixed coupon and a 60% to 65% conversion premium, with pricing expected after the New York market close on Monday.
The company plans to use part of the proceeds to pay for capped call transactions, which could help offset potential share dilution if the notes convert. Robinhood also expects to use about $300 million for common stock buybacks, though the final amount may be higher or lower.
Shares fell 1.7% to $106.27 in premarket trading as of 8:14 a.m., suggesting investors may be weighing the financing move against Robinhood's broader push to stay disciplined. The company said last week it would cut 10% of its workforce, or about 300 positions, while Goldman Sachs and JPMorgan are leading the bond deal.
Opportunistic capital raise with proceeds used to enhance strategic flexibility to invest for future growth
Approximately $290 million of the proceeds to be used to repurchase shares concurrently with the Offering
Additionally, a portion of the proceeds to be used to purchase capped calls intended to offset any share dilution until a 125% premium to the last reported sale price of Robinhood’s Class A common stock on the date of pricing
MENLO PARK, Calif., June 22, 2026 (GLOBE NEWSWIRE) -- Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today announced that it has priced an offering of $2.0 billion in aggregate principal amount of 0.00% convertible senior notes due 2029 (the “Notes”) in a private placement (the “Offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). Robinhood has also granted the initial purchasers of the Notes an option to purchase, for settlement within a 13-day period from, and including the date on which the Notes are first issued, up to an additional $200 million aggregate principal amount of Notes. The Offering is expected to close on June 25, 2026, subject to the satisfaction of customary closing conditions.
The Notes will be senior, unsecured obligations of Robinhood. The Notes will not bear regular interest, and the principal amount of the notes will not accrete. Robinhood will settle conversions by paying cash up to the aggregate principal amount of the Notes to be converted and paying or delivering, as the case may be, cash, shares of Robinhood’s Class A common stock or a combination of cash and shares of Robinhood’s Class A common stock, at Robinhood’s election, in respect of the remainder, if any, of Robinhood’s conversion obligation in excess of the aggregate principal amount of the Notes being converted, based on the then applicable conversion rate. The Notes will mature on October 1, 2029, unless earlier converted, redeemed or repurchased.
Robinhood may not redeem the Notes prior to July 1, 2028, except in the event of a cleanup redemption (as defined below). Robinhood may redeem for cash all or any portion of the Notes (subject to certain limitations), at its option, on or after July 1, 2028 and prior to the 21st scheduled trading day immediately preceding October 1, 2029, if the last reported sale price of Robinhood’s Class A common stock has been at least 120% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Robinhood provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. In addition, the Notes will be redeemable at any time if the aggregate principal amount of the Notes that remains outstanding is less than $100 million and certain other conditions are satisfied (a “cleanup redemption”).
Robinhood estimates that the net proceeds from the Offering will be approximately $1,971.8 million (or approximately $2,169.1 million if the initial purchasers exercise their option to purchase additional Notes in full), after deducting the initial purchasers’ discounts and estimated expenses payable by Robinhood. Robinhood intends to use (i) approximately $290 million of the net proceeds from the Offering to repurchase its Class A common stock concurrently with the pricing of the Offering in privately negotiated transactions effected with or through one of the initial purchasers of the Notes or its affiliate at a purchase price per share equal to the last reported sale price of Robinhood’s Class A common stock on the Nasdaq Global Select Market (the “Nasdaq”) on June 22, 2026, (ii) $112 million of the net proceeds from the Offering to fund the costs of the capped call transactions described below and (iii) the remainder of the net proceeds from the Offering, if any, for general corporate purposes, which may include organic growth investments, potential acquisitions and/or capital expenditures. If the initial purchasers exercise their option to purchase additional Notes, Robinhood expects to use a portion of the net proceeds from the sale of the additional Notes to enter into additional capped call transactions. In addition, following the Offering, Robinhood plans to continue to repurchase additional shares of its Class A common stock pursuant to Robinhood’s stock repurchase program. The repurchases of Robinhood’s Class A common stock described above could increase (or reduce the size of any decrease in) the market price of Robinhood’s Class A common stock or the Notes.
At any time prior to the close of business on the business day immediately preceding July 1, 2029, the Notes will be convertible at the option of the holders of the Notes only upon the satisfaction of specified conditions and during certain periods. On or after July 1, 2029, until the close of business on the second scheduled trading day immediately preceding the maturity date, the Notes will be convertible at the option of the holders of the Notes at any time regardless of these conditions. The initial conversion rate will be 5.7332 shares of Robinhood’s Class A common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $174.42 per share of Robinhood’s Class A common stock). The initial conversion price of the Notes represents a premium of approximately 65.0% over the last reported sale price of Robinhood’s Class A common stock on the Nasdaq on June 22, 2026.
Subject to certain conditions, if Robinhood undergoes a “fundamental change” (as defined in the indenture that will govern the Notes), holders of the Notes may require Robinhood to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid special interest to, but excluding, the fundamental change repurchase date. In addition, upon certain corporate events that occur prior to the maturity date or upon redemption, Robinhood will, under certain circumstances, increase the conversion rate for holders who elect to convert their Notes in connection with any such corporate event or convert their Notes called (or deemed called) for redemption during the related redemption period, as the case may be.
In connection with the pricing of the Notes, Robinhood entered into privately negotiated capped call transactions with certain initial purchasers of the Notes or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of Robinhood’s Class A common stock initially underlying the Notes sold in the Offering. The capped call transactions are expected generally to reduce potential dilution to Robinhood’s Class A common stock upon conversion of any Notes and/or offset any cash payments Robinhood is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on a cap price initially equal to approximately $237.85 per share, which represents a premium of approximately 125% over the last reported sale price of Robinhood’s Class A common stock on the Nasdaq on June 22, 2026.
Robinhood has been advised that, as is customary for convertible note offerings that include capped call transactions, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Robinhood’s Class A common stock and/or enter into various derivative transactions with respect to Robinhood’s Class A common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Robinhood’s Class A common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Robinhood’s Class A common stock and/or purchasing or selling Robinhood’s Class A common stock or other securities of Robinhood in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so (x) during any observation period related to a conversion of Notes or following any repurchase of Notes in connection with any “fundamental change” (as defined in the indenture for the Notes) and (y) following any other repurchase of Notes if Robinhood elects to unwind a portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or decrease in the market price of Robinhood’s Class A common stock or the Notes, which could affect the ability of noteholders to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of Notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the Notes.
Neither the Notes nor the shares of Robinhood’s Class A common stock potentially issuable upon conversion of the Notes, if any, have been, or will be, registered under the Securities Act, the securities laws of any other jurisdiction or any state securities laws and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act. This news release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, the Notes, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale is unlawful. No assurance can be made that the Offering will be consummated on its proposed terms or at all.
This press release contains forward-looking statements regarding Robinhood and its consolidated subsidiaries (“we,” “Robinhood,” or the “Company”), including, but not limited to, statements regarding the completion and timing of the Offering and capped call transactions, the anticipated effects of entering into the capped call transactions, and the intended use of the net proceeds from the Offering and the anticipated effects thereof. In some cases, you can identify forward-looking statements because they contain words such as “believe,” “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Our forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual future results, performance, or achievements to differ materially from any future results expressed or implied in this press release. Factors that contribute to the uncertain nature of our forward-looking statements include, among others, risks and uncertainties associated with market conditions, including market interest rates, the trading price and volatility of Robinhood's Class A common stock and risks related to this Offering, and Robinhood’s business and operations and results of operations. Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events. More information about potential risks and uncertainties that could affect our business and financial results can be found in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as well as in our other filings with the SEC, all of which are available on the SEC’s web site at www.sec.gov. Moreover, we operate in a very competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible for us to predict all risks nor identify all uncertainties. The events and circumstances reflected in our forward-looking statements might not be achieved and actual results could differ materially from those projected in the forward-looking statements. Except as otherwise noted, all forward-looking statements in this press release are made as of the date of this press release, June 22, 2026, and are based on information and estimates available to us at this time. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by law, Robinhood assumes no obligation to update any of the statements in this press release whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this press release with the understanding that our actual future results, performance, events, and circumstances might be materially different from what we expect.
Key Takeaways Robinhood priced $2B in 0.00% convertible notes due 2029 to bolster its capital cushion.HOOD will use $290M for buybacks and $112M for capped calls to help limit dilution.Robinhood entered 2026 with revenues up 15% and net income of $346M. Robinhood Markets’ (HOOD - Free Report) $2 billion convertible debt offering looks less like a distress signal and more like an opportunistic balance sheet move. The company priced 0.00% convertible senior notes due 2029, giving it a sizeable capital cushion without adding regular interest expense. That matters because the company is expanding across higher-growth areas, including crypto, prediction markets, retirement, wealth management and institutional products.
The proceeds give Robinhood three financial advantages. First, roughly $290 million will be used for share repurchases, helping offset immediate dilution concerns and supporting per-share metrics. Second, $112 million will fund capped call transactions, which are designed to reduce potential dilution if the notes convert, up to a cap price of about $237.85 per share. Third, the remaining proceeds can be deployed toward organic investments, acquisitions and capital expenditures.
The timing is important. Robinhood entered 2026 with strong operating momentum. In the first quarter, revenues rose 15% year over year to $1.07 billion, net income reached $346 million and adjusted EBITDA was $534 million. As of May 31, 2026, platform assets climbed 48% year over year to $377 billion, while event-contract trading hit 3.9 billion contracts in May.
For investors, the key risk is future dilution if Robinhood’s stock rallies sharply above the conversion threshold. However, the 65% conversion premium, buybacks and capped calls soften that concern. With no regular coupon, the notes preserve cash while giving HOOD dry powder to fund expansion. If management deploys the capital effectively, this debt play could support revenue diversification, operating scale and long-term earnings power.
Robinhood’s Peers Diversifying Their BusinessesTwo close peers of HOOD are Charles Schwab (SCHW - Free Report) and Interactive Brokers Group (IBKR - Free Report) .
Schwab is diversifying beyond brokerage into wealth management, advisory, banking, lending, retirement and asset management. Schwab’s fee-based assets, net interest income and broader financial services reduce commission dependence, support steadier revenues and deepen client relationships.
Interactive Brokers is diversifying through global market access, high-yield cash balances, securities lending, institutional services, retirement accounts and advisor solutions. Interactive Brokers’ interest income, international reach and technology platform reduce trading-commission reliance while supporting scalable growth.
HOOD’s Price Performance, Valuation & Estimate AnalysisOver the past three months, Robinhood’s shares have soared 53%, outperforming the industry’s growth of 17.4%.
Image Source: Zacks Investment Research
HOOD’s shares are currently trading at a premium to the industry. The company has a 12-month trailing price-to-tangible book (P/TB) of 10.65X compared with the industry average of 3.40X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Robinhood’s 2026 earnings suggests a year-over-year decline of 11.7%. The trend is likely to reverse next year, with earnings expected to jump 352%. In the past week, earnings estimates for 2026 and 2027 have remained unchanged at $1.81 and $2.45 per share, respectively.
Image Source: Zacks Investment Research
HOOD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Robinhood Markets, Inc. (HOOD - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this company have returned +43.6%, compared to the Zacks S&P 500 composite's +0.1% change. During this period, the Zacks Financial - Investment Bank industry, which Robinhood Markets falls in, has gained 10.8%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Robinhood Markets is expected to post earnings of $0.41 per share, indicating a change of -2.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.1% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $1.8 points to a change of -12.2% from the prior year. Over the last 30 days, this estimate has changed -0.5%.
For the next fiscal year, the consensus earnings estimate of $2.43 indicates a change of +34.7% from what Robinhood Markets is expected to report a year ago. Over the past month, the estimate has changed -0.5%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Robinhood Markets.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Robinhood Markets, the consensus sales estimate of $1.2 billion for the current quarter points to a year-over-year change of +21.5%. The $4.98 billion and $6.22 billion estimates for the current and next fiscal years indicate changes of +11.3% and +24.8%, respectively.
Last Reported Results and Surprise HistoryRobinhood Markets reported revenues of $1.07 billion in the last reported quarter, representing a year-over-year change of +15.1%. EPS of $0.38 for the same period compares with $0.37 a year ago.
Compared to the Zacks Consensus Estimate of $1.14 billion, the reported revenues represent a surprise of -6.07%. The EPS surprise was -5%.
Over the last four quarters, Robinhood Markets surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Robinhood Markets is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Robinhood Markets. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways PATH customers are increasingly deploying agentic AI in production rather than test environments.UiPath benefits from its role in orchestrating workflows and automating enterprise AI operations.PATH launched UiPath for Coding Agents to speed deployment and accelerate customer value. UiPath (PATH - Free Report) is making meaningful progress in one of the most important areas of enterprise software today: agentic AI adoption. One year after making its agentic products generally available, the company is seeing customers move beyond pilot programs and into production deployments, a key milestone for any emerging technology platform.
The transition from experimentation to production suggests that enterprises are increasingly finding real-world value in UiPath’s AI offerings. Rather than using agentic AI in isolated test environments, customers are beginning to integrate these capabilities into everyday business processes, creating opportunities for broader and deeper platform adoption.
A major reason for this momentum is UiPath’s position as both an orchestration and automation execution platform. As enterprises deploy AI agents, they also need systems that can coordinate workflows, automate actions, and connect AI outputs with business operations. UiPath’s platform is designed to address those requirements, making it a natural component of enterprise AI transformation initiatives.
The recent launch of UiPath for Coding Agents further strengthens the company’s position. By helping customers accelerate deployment and achieve faster time to value, the offering may encourage greater adoption across the broader platform.
For investors, the key takeaway is straightforward: agentic AI is increasingly becoming a real business opportunity rather than a future concept. As customers standardize on UiPath’s platform to support enterprise AI initiatives, the company appears well-positioned to benefit from growing demand for automation, orchestration and AI-powered workflow management.
Peer ComparisonMicrosoft (MSFT - Free Report) and ServiceNow (NOW - Free Report) remain formidable rivals, but their financial strategies differ from UiPath’s. Microsoft, while a giant with unparalleled scale, must spread capital across diverse segments such as cloud, gaming, and productivity software, somewhat diluting its focus on automation. ServiceNow continues to gain traction in enterprise workflow automation but remains heavily invested in sustaining growth momentum, balancing expansion with cost pressures.
Compared to these players, UiPath’s debt-free balance sheet allows it to dedicate resources squarely to automation. Microsoft has the advantage of size, and ServiceNow has enterprise reach, but UiPath’s singular financial flexibility gives it agility neither can fully replicate.
PATH’s Price Performance, Valuation and EstimatesThe stock has declined 17% over the past year compared with the industry’s 16% fall.
Image Source: Zacks Investment Research
From a valuation standpoint, PATH trades at a forward price-to-earnings ratio of 12.31X, which is well below the industry’s average of 26.54X. It carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PATH’s fiscal 2027 earnings has risen over the past 30 days.
PATH stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: UiPath (PATH - Free Report) UiPath, Inc. provides an end-to-end enterprise automation platform that combines robotic process automation with AI to help organizations discover, build, and operate software automations at scale. The UiPath Platform enables users to automate tasks across user interfaces, APIs, and documents, and to orchestrate digital workers that collaborate with people. Core capabilities include AI-powered document understanding, low-code design tools, process mining to identify automation opportunities, automated testing, analytics, and centralized governance. The company was first established in Bucharest, Romania in 2005 and incorporated in Delaware in 2015. Its principal executive offices are at One Vanderbilt Avenue, New York, NY.
PATH is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. PATH has a Growth Style Score of B, forecasting year-over-year earnings growth of 9.7% for the current fiscal year.
Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.01 to $0.79 per share. PATH also boasts an average earnings surprise of +30.5%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, PATH should be on investors' short list.
UiPath (PATH +1.23%), an enterprise automation software provider, closed at $10.15, down 1.07%. UiPath traded lower despite the recent launch of Maestro Case, as investors continued to weigh its agentic automation push against the need for stronger ARR growth.
The company’s trading volume reached 51.8M shares, coming in about 47% above its three-month average of 33.6M shares.
How the markets moved todayThe S&P 500 (^GSPC 1.33%) fell 0.37% to 7,472.79, while the Nasdaq Composite (^IXIC 1.97%) dropped 1.32% to 26,1676.60. Among enterprise software — robotic process automation and workflow automation peers, Pegasystems (PEGA +0.31%) closed at $29.38, down 2.36%, highlighting continued pressure on automation names.
What this means for investorsUiPath shares declined following the launch of Maestro Case, an AI-native tool that coordinates agents, robots, people, applications, and data in complex enterprise workflows. This release strengthens UiPath’s agentic automation offering, particularly for exception-heavy processes like dispute resolution and KYC, where early adopters have reported faster case handling and increased automation rates.
The next key indicator will be whether product momentum appears in recurring growth metrics. While Q1 results showed higher revenue, ARR growth, improved profitability, and stronger cash flow, investors remain focused on whether agentic automation will increase net new ARR, retention, and customer expansion. Upcoming earnings and guidance will indicate if UiPath can combine margin discipline with a stronger growth profile.
Eric Trie has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends UiPath. The Motley Fool has a disclosure policy.
UiPath (PATH - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this enterprise automation software developer have returned -7%, compared to the Zacks S&P 500 composite's +0.1% change. During this period, the Zacks Internet - Software industry, which UiPath falls in, has lost 4.7%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
UiPath is expected to post earnings of $0.15 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed +74.2%.
For the current fiscal year, the consensus earnings estimate of $0.79 points to a change of +9.7% from the prior year. Over the last 30 days, this estimate has changed +18.4%.
For the next fiscal year, the consensus earnings estimate of $0.9 indicates a change of +14.3% from what UiPath is expected to report a year ago. Over the past month, the estimate has changed +3.8%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for UiPath.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For UiPath, the consensus sales estimate for the current quarter of $397.59 million indicates a year-over-year change of +9.9%. For the current and next fiscal years, $1.78 billion and $1.92 billion estimates indicate +10.4% and +8.2% changes, respectively.
Last Reported Results and Surprise HistoryUiPath reported revenues of $418.38 million in the last reported quarter, representing a year-over-year change of +17.3%. EPS of $0.15 for the same period compares with $0.11 a year ago.
Compared to the Zacks Consensus Estimate of $397.43 million, the reported revenues represent a surprise of +5.27%. The EPS surprise was 0%.
Over the last four quarters, UiPath surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
UiPath is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about UiPath. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Monday.com (MNDY - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this project management software developer have returned -6.2%, compared to the Zacks S&P 500 composite's +1.4% change. During this period, the Zacks Internet - Software industry, which Monday.com falls in, has lost 0.7%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Monday.com is expected to post earnings of $1.14 per share, indicating a change of +4.6% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $4.49 points to a change of +2.1% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $5.45 indicates a change of +21.4% from what Monday.com is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Monday.com.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Monday.com, the consensus sales estimate of $354.95 million for the current quarter points to a year-over-year change of +18.7%. The $1.47 billion and $1.7 billion estimates for the current and next fiscal years indicate changes of +19.3% and +15.8%, respectively.
Last Reported Results and Surprise HistoryMonday.com reported revenues of $351.27 million in the last reported quarter, representing a year-over-year change of +24.5%. EPS of $1.15 for the same period compares with $1.1 a year ago.
Compared to the Zacks Consensus Estimate of $338.9 million, the reported revenues represent a surprise of +3.65%. The EPS surprise was +19.79%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Monday.com is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Monday.com. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
In the latest close session, Monday.com (MNDY - Free Report) was down 1.64% at $70.36. The stock fell short of the S&P 500, which registered a loss of 0.37% for the day. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq lost 1.33%.
Prior to today's trading, shares of the project management software developer had lost 9.52% lagged the Computer and Technology sector's gain of 4.52% and the S&P 500's gain of 2.02%.
Investors will be eagerly watching for the performance of Monday.com in its upcoming earnings disclosure. The company is expected to report EPS of $1.14, up 4.59% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $354.95 million, reflecting a 18.71% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.49 per share and a revenue of $1.47 billion, representing changes of +2.05% and +19.34%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Mondaycom. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Monday.com is currently a Zacks Rank #3 (Hold).
In terms of valuation, Monday.com is presently being traded at a Forward P/E ratio of 15.95. This denotes a discount relative to the industry average Forward P/E of 18.33.
It is also worth noting that MNDY currently has a PEG ratio of 1.27. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Software industry had an average PEG ratio of 0.99 as trading concluded yesterday.
The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 84, placing it within the top 35% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Significantly strengthens the company’s balance sheet and provides $150 million of new capital to advance Medallia’s $500 million commitment to innovation, including AI transformation, in the coming years
TYSONS, Va.--(BUSINESS WIRE)--Medallia, the global leader in customer and employee experience, today announced that it has entered into a recapitalization agreement with its lenders that will strengthen its financial foundation for long-term growth. The transaction will significantly reduce Medallia’s outstanding debt and provide $150 million of new capital, positioning the company to accelerate AI-driven innovation and customer-focused product investment. Upon completion of the transaction, Medallia will change ownership from Thoma Bravo to an investor group led by Blackstone, Apollo, and FS KKR Capital Corp (FSK).
Medallia has been at the center of enterprise experience management since its founding in 2001 – going public on the New York Stock Exchange in 2019 before being taken private in 2021. Eighteen months ago, a new executive team joined to reinvent the business for an AI-first market, modernizing operations, and sharpening strategic focus while maintaining strong profitability. Today's transaction advances Medallia's existing $500 million commitment to innovation over the next few years and provides the capital to accelerate it, moving the company beyond traditional experience management into a more intelligent, predictive, and automated platform.
“Today's announcement marks a significant milestone towards the next generation of AI-led enterprise experience management,” said Mark Bishof, CEO of Medallia. “The transformation of Medallia has been well underway – what changes today is the pace. With a strengthened balance sheet and $150 million in new capital, we are accelerating our commitment to invest over $500 million in products and services for our customers over the next few years.”
The committed support of Medallia’s new owners reflects strong conviction in the company’s leadership team, platform strategy, and long-term market opportunity. In addition to new capital, Medallia will benefit from the firms’ collective expertise in scaling businesses globally, strategic relationships, and global resources to enhance Medallia’s platform capabilities and market leadership.
“Medallia is a profitable business with a strong track record serving many of the largest companies in the world,” said Brad Marshall, Global Head of Private Credit Strategies at Blackstone. “We’re confident in the business under this new capital structure and look forward to supporting its plans to invest in this next phase of innovation and growth.”
Medallia plans to expand its generative AI and automation capabilities across its platform, enabling organizations to more quickly identify emerging patterns, predict business impact, and orchestrate intelligent actions at enterprise scale. Building on its Frontline-Ready AITM foundation, Medallia also plans to further evolve its platform with deeper integrations across contact center, CRM, workflow, and emerging agentic AI ecosystems. Leading organizations including Mayo Clinic Laboratories, Mazda North America, and Santander Bank are among the customers who recently shared how Medallia powers their experience management programs. The company's planned platform enhancements will empower enterprises to respond to their customer and employee needs with greater speed, precision, and operational impact.
The company expects to close the transaction prior to the end of the year, subject to customary closing conditions and regulatory approvals. As Medallia works with its financial partners to close the transaction, operations remain uninterrupted, with no anticipated impact or disruption to the company’s customers, employees, or partners.
About Medallia
Medallia is the global leader in customer and employee experience, trusted by the world’s most iconic brands — including 7 of the Fortune 10. Medallia’s AI-driven platform helps enterprise organizations turn billions of feedback signals into clear, prioritized actions. With deep domain expertise, a powerful partner ecosystem, and consistent leadership recognition from top industry analysts, Medallia transforms customer experience into a strategic driver of business growth. Learn more at www.medallia.com.
AirTrunk, the Blackstone BX -backed data center operator, is in talks with banks for a A$4.3 billion ($3 billion) loan to support a new Australian project, as the company continues expanding across Asia Pacific with debt-backed financing. People familiar with the matter said proceeds would help fund construction of SYD3, a hyperscale data center of more than 400 megawatts. Banks have been approached to underwrite the five-year deal, though terms have not been finalized and could still change.
The move comes as lenders keep pouring capital into AI-linked digital infrastructure. JPMorgan Chase JPM has estimated that AI buildout costs could reach $5.5 trillion by 2030, with around $4.1 trillion of debt needed to support the digital infrastructure boom. That scale of financing could keep data center operators in focus for investors, while also raising concerns that the sector may be moving toward a credit-fueled bubble.
AirTrunk has been pushing deeper into the region. Earlier in June, it announced plans to invest around $30 billion in India after buying Lumina CloudInfra in April. The company is also marketing a $2.3 billion syndicated loan for a Malaysia data center buildout and plans to raise at least A$500 million through asset-backed bonds in the second half of the year. AirTrunk operates data centers in Australia, Hong Kong, Japan, Malaysia and Singapore, and Blackstone and Canada Pension Plan Investment Board acquired the company in 2024 at a A$24 billion valuation.
Key Takeaways BoE launches first private-market stress test with 46 firms, including APO, ARES, BX, KKR and JPM.BoE Stress test assumes a 4% U.K. GDP drop, 7% inflation, 7% interest rates and a 35% equity market fall.Initial findings will be shared by 2026-end, with a second test early next year and conclusions in 2027. The Bank of England (“BoE”) has turned its attention to one of global finance’s fastest-growing sectors, private markets. The BoE has launched a “doomsday” stress test designed to determine whether the rapidly expanding private markets sector can withstand a severe global financial shock. The exercise, described as the first of its kind worldwide, reflects growing regulatory concerns over the increasing role of private credit and private equity in the global financial system.
In the stress test, 46 firms have agreed to take part, including alternative asset managers Apollo Global Management Inc. (APO - Free Report) , Ares Management Corp. (ARES - Free Report) , Blackstone Inc. (BX - Free Report) and KKR & Co. (KKR - Free Report) . Also, major banks, which provide leverage across the private markets ecosystem like Barclays and JPMorgan (JPM - Free Report) , and asset managers such as BlackRock have also participated.
Here’s Why Private Markets Are Under the SpotlightPrivate markets, including private equity, private credit and other non-public investments, have expanded rapidly over the past decade, attracting trillions of dollars from institutional investors seeking higher returns.
But scale changes the risk profile. With global private-market assets estimated at $16 trillion, the sector has become too large to ignore. Regulators are increasingly focused on its limited transparency, complex valuation practices and growing links to the broader financial system. Unlike publicly traded assets, private investments can be difficult to price and may become harder to sell during periods of market stress.
The Financial Stability Board has recently warned of emerging stresses in private credit, which often involves opaque, non-bank lending to mid-sized companies. The BoE is concerned that this opacity could amplify isolated failures into wider financial instability, especially given private equity-backed firms’ significant role in U.K. employment and corporate debt.
The BoE concern is not that private markets are inherently fragile, but that they have not yet been tested through a prolonged downturn at their current scale. Much of the industry’s growth took place during a period of low interest rates, abundant liquidity and strong fundraising. A sustained environment of higher borrowing costs, weaker valuations and tighter refinancing conditions could reveal vulnerabilities that have been hidden in more favorable market conditions.
The BoE’s Stress Test ScenarioThe BoE's private markets’ stress test is built around a severe but plausible five-year global recession designed to assess how private equity firms, private credit managers, banks and institutional investors would respond to extreme financial stress. Rather than evaluating the resilience of individual firms, the exercise focuses on identifying vulnerabilities that could threaten the stability of the broader financial system.
The test scenario assumes that U.K. interest rates and inflation both rise to 7% in the first year, while the economy subsequently enters a deep recession, with UK GDP contracting 4% in the second year. During the recovery period, unemployment increases to 7.5%, U.K. equity markets fall 35%, leveraged loan spreads widen by 400 basis points and market volatility rises sharply, with the volatility index reaching around 40. Although the economy is expected to recover, growth remains weak over the following three years, averaging 0.7% annually.
In addition to macroeconomic shocks, the scenario incorporates artificial intelligence (AI)-related risks by assuming higher energy costs, shortages of advanced semiconductors and slower adoption of AI technologies. These factors are intended to test how reduced productivity gains and disruptions to AI-dependent sectors could affect investment portfolios and financial stability.
Participants like Apollo Global, Ares Management, Blackrock, KKR & Co. and JPMorgan are required to evaluate how they would respond to the stress scenario, submit their expected actions and portfolio adjustments, and review market-wide aggregated feedback provided by the BoE. The BoE will then revise and resubmit their responses in a second round.
The BoE will publish only aggregate results, using the exercise to better understand how stress in the private markets could transmit through the broader financial system. Initial findings from the information-gathering phase will be included in the July Financial Stability Report. Interim results from Round 1 will be released later in 2026, with the final report expected in 2027.
Final TakeawaysThe BoE’s stress test marks a significant step in expanding regulatory oversight beyond traditional banks to the rapidly growing private markets sector. By simulating an extended period of economic stress, higher interest rates, declining asset values and AI-related disruptions, the exercise aims to identify how risks could spread through an increasingly interconnected financial system.
While the test is not intended to assess the resilience of individual firms, the participation of major firms like BlackRock, KKR & Co., Ares Management, Apollo Global and JPMorgan, the stress test may deliver critical insights into how vulnerable the system may be under severe strain.
As private equity and private credit continue to play a larger role in global finance, the results of this pioneering exercise could shape future regulatory frameworks, risk management practices and transparency standards for the industry. Ultimately, the findings will help regulators better understand whether private markets can remain resilient under extreme conditions or whether additional safeguards are needed to protect broader financial stability.
Chipotle Mexican Grill (CMG - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this Mexican food chain have returned -1.3%, compared to the Zacks S&P 500 composite's +1.6% change. During this period, the Zacks Retail - Restaurants industry, which Chipotle falls in, has gained 2.4%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Chipotle is expected to post earnings of $0.32 per share, indicating a change of -3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $1.13 points to a change of -3.4% from the prior year. Over the last 30 days, this estimate has changed +0.1%.
For the next fiscal year, the consensus earnings estimate of $1.35 indicates a change of +19.5% from what Chipotle is expected to report a year ago. Over the past month, the estimate has changed -0.2%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Chipotle.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Chipotle, the consensus sales estimate of $3.32 billion for the current quarter points to a year-over-year change of +8.3%. The $12.93 billion and $14.31 billion estimates for the current and next fiscal years indicate changes of +8.4% and +10.7%, respectively.
Last Reported Results and Surprise HistoryChipotle reported revenues of $3.09 billion in the last reported quarter, representing a year-over-year change of +7.4%. EPS of $0.24 for the same period compares with $0.29 a year ago.
Compared to the Zacks Consensus Estimate of $3.08 billion, the reported revenues represent a surprise of +0.41%. The EPS surprise was 0%.
Over the last four quarters, Chipotle surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Chipotle is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Chipotle. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
