4 Overvalued Robinhood Stocks to Avoid in October

The newly public Robinhood Markets, Inc.’s (HOOD) platform — known for pioneering commission-free stock trading with no account minimums — witnessed a big surge in first-time users joining its platform amid the COVID-19 pandemic. Its easy-to-use mobile app and features such as…

fractional trading have attracted more users to its platform especially Millennials and Generation Z.

However, according to JPMorgan Chase & Co. (JPM) analysts, HOOD’s metrics of active users and app downloads plunged during the third quarter, worse than expected. Several investors were furious when it temporarily halted trading in some of the meme stocks. While stocks traded on the platform are considered the most popular ones, not all of them are good bets now.

Carnival Corporation & plc (CCL – Get Rating), Plug Power Inc. (PLUG – Get Rating), Aurora Cannabis Inc. (ACB – Get Rating), and Zomedica Corp. (ZOM – Get Rating) are some of the most-traded stocks on the HOOD platform. However, they look significantly overvalued at their current price levels. So, it could be wise to avoid them now.

Carnival Corporation & plc (CCL – Get Rating)

Leisure travel company CCL operates across North America, Australia, Europe, and Asia. Its ships visit approximately 700 ports under the Carnival Cruise Line, Princess Cruises, Holland America Line, and P&O Cruises (Australia) brand names, among other brands. It is ranked #23 of the top 100 Robinhood stocks.

On October 6, CCL’s Carnival Cruise Line announced plans for more ship restarts for January and February as it works toward returning to its full-fleet sailing from U.S. homeports in the spring of 2022. However, Carnival Splendor from Sydney, Australia, is canceled through February 7, 2022, and Carnival Spirit from Brisbane, Australia, is canceled through February 20, 2022.

CCL’s adjusted net loss increased 16.9% year-over-year to $1.99 billion for the fiscal third quarter ended August 31, 2021. Also, the company’s available lower berth days (ALBD) in the quarter came in at 3.8 million, representing only 17% of the total fleet capacity.

In terms of forward EV/S, CCL’s 20.81x is 1,355.2% higher than the industry average of 1.43x. Moreover, its forward P/S of 11.27x is also 856.9% higher than the industry average of 1.18x.

Analysts expect CCL’s EPS to remain negative in fiscal 2021. Also, the stock has lost 12.9% over the past six months to close yesterday’s trading session at $24.90.

CCL’s POWR Ratings reflect its poor prospects. It has an overall grade of F, which indicates a Strong Sell. The POWR Ratings assess stocks by 118 different factors, each with its weighting.

Also, the stock has an F grade for Value, Stability, and Quality, and a D grade for Sentiment. Click here to access the additional POWR Ratings for CCL (Momentum and Growth). CCL is ranked #2 of 4 stocks in the F-rated Travel – Cruises industry.

Plug Power Inc. (PLUG – Get Rating)

PLUG provides hydrogen fuel cell turnkey solutions for electric mobility and stationary power markets across North America and Europe. It focuses on proton exchange membrane (PEM) fuel cell and fuel processing technologies. It is ranked #22 on the Robinhood Top 100 list.

The Shareholders Foundation, Inc. announced in May 2021 that a lawsuit is pending for certain investors in PLUG’s shares. It is alleged that the company failed to disclose that it would be unable to file its 2020 annual report timely, among other allegations.

PLUG’s net revenues increased 83.2% year-over-year to $124.56 million for the second quarter ended June 30, 2021. However…

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