5 Robinhood Stocks That Will Blow Up 

Upstart Holdings, Inc. (UPST)

Upstart is an automated loan application platform that uses artificial intelligence technology to streamline the lending and decision-making process for banks and their customers. The company is one of 2021’s best performing stocks and is already up over four times its price from its earlier December IPO. 

The online lender has some staggering growth metrics to buoy investor’s optimism – but it comes with a hefty premium too. The company’s revenues are up 90% year-on-year, and it’s expected to grow another 70% in the following twelve months.

However, the firm trades at a vertigo inducing forward P/E multiple of 620, as well as a trailing Price/Cash Flow ratio of 65.

Still, Upstart is a rare specimen in its particular online lending niche right now, not least because the firm’s business is actually profitable. Its previous year’s Gross Profit Margin came in at an admirable 85%, and it beat its EPS estimate by $0.07 with a per share earnings of $0.22.

Upstart is a fast-growing enterprise with a disruptive business model. The company is able to instantly approve 71% of loans processed on its platform, and because of the firm’s partnership with open-API software developer NXTsoft, its products can seamlessly integrate with almost any banking system it works with either now or in the future.

Moreover, Upstart has a huge addressable market into which it can expand. Its recent move into the auto loan industry represents a potential $626 billion opportunity, not to mention the $92 billion personal loan space and the $3.4 trillion offered by the credit card and mortgage business.

Upstart’s shares dropped 7% lately after a privately negotiated high-volume block trade of some 1.69 million shares depressed its price at the beginning of June. It has yet to recover this ground, but it is likely to do so soon. At this discounted price, and with enormous growth on the horizon, Upstart is surely ripe for the picking.

Peloton Interactive, Inc. (PTON)

Peloton’s recent woes made headlines in all the wrong ways, but the once-dire outlook for the New York-based exercise equipment manufacturer doesn’t appear to have come to fruition of late.

The recall of 125,000 Peloton Tread+ treadmills in May certainly struck a blow to the reputation of the company – and the financial fallout from the scandal won’t be trivial either, with an expected cost of $165 million almost certainly going to hit its bottom line.

And yet, the company’s share price has found momentum again after its $82 lows in May, having gained over 50% in the interim to trade today at a little over $120. This isn’t surprising: Peloton might have lost 30% of its January 2021 high of $171, but its business is healthy, with some solid quarterly results to show for it.

For instance, digital subscriptions topped out at 891,000 in the third quarter 2021, up from just 316,800 for the fourth quarter 2020, with its Connected Fitness Subscriptions almost doubling to a total of over 2 million. The company also beat on both EPS and revenue expectations, breaking even with its per share profit and outperforming on sales by $141 million with revenues of $1.26 billion.

Customers seem to be flooding back to Peloton now, despite its tough year. And yes, the pandemic tailwinds that saw it soar through 2020 might be abating, but the company is on a good footing. It has a strong cash position of $2.7 billion, giving the business some well-needed breathing space. If it stays the course, analysts expect Peloton to return to profitability sometime later this year.

SoFi Technologies, Inc. (SOFI)

SoFi is another one of those FinTech companies that seems to do everything right except make a profit. But don’t be fooled; this outfit is creating a powerful all-in-one banking solution for internet-savvy customers who have adopted digital banking in their droves.

The firm is making deep inroads into the banking banking sector on three main fronts: its consumer lending business, its back-end technology platform, and its financial services wing.

So far, the company has enjoyed enormous growth. Its membership rose for the last seven consecutive quarters, and now boats a total of 2.28 active users, while its financial products segment – which focuses on investment, insurance, and credit card sales – grew by 273% year-on-year.

The company forecasts it will turn profitable in 2023, although given its performance to date that could come a lot sooner. Its EBITDA margin shifted into the positive recently, exceeding even the firm’s own top-end estimations.

Anthony Noto, SoFi’s CEO, said in a previous interview that the Galileo platform the firm is developing is so much in demand that the most pressing concern facing management is choosing which opportunities it has to turn down. That’s not a bad situation to be in, and one that signals continued growth for the company for a long time to come.

Source: Unsplash

Futu Holdings Limited (FUTU)

For our Chinese readers, this article might well be titled “5 Futu Stocks That Will Blow Up”, since the Hong Kong firm is fast becoming a local Asian rival to its US-based digital brokerage counterpart.

And there are good reasons to be bullish about Futu’s prospects as a growth company too. The firm had a Net Income Margin of almost 50% at the last reporting, with a Gross Profit Margin of over 85% as well. Its revenue growth stands at 287% for the previous twelve months, which, given the sector median is currently just 9.71%, is mightily impressive. 

Its valuation metrics are also rather tempting, with a forward Price/Cash Flow of 2.36 stacking up well against its competition’s more leaden 11.42.

Investors should expect Futu to maintain this growth – and with profits of HK$1.32 billion last year, the business is well and truly on track.

Roblox Corporation (RBLX)

The COVID-19 outbreak proved to be a positive catalyst for Roblox’s fortunes in 2020, driving the company’s revenues up 140% and seeing its Daily Active Users skyrocket to 42.1 million.

The online gaming platform also benefited with a spike in its share price after its March 2021 flotation, gaining over 40% on its direct listing valuation to hit highs of over $100.

Roblox’s future business strategy will depend on its ability to exploit a variety of potential growth factors, many of which will seek to capitalize on the company’s network effect arising out of its dual role as a social media and gaming platform. 

Some bearish critics will claim that Roblox’s success is too dependent on the tailwinds that came with the coronavirus pandemic, and that its present valuation – it has a one-year forward P/E of 96, and it missed its last revenue prediction by $185 million – puts it off limits to most investors.

But as a high-risk gamble on a novel and unusual gaming stock, Roblox still has the potential to bring in big returns for those with the nerve to see it through.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.