graphical user interface: A magnifying glass zooms in on the website for Robinhood (HOOD).On August 18 Robinhood Markets (NASDAQ:HOOD) released Q2 earnings to a skeptical market. It now appears that HOOD will take longer than previously expected to become profitable. Interestingly though, HOOD stock has not moved down too much. It opened at $46.30 on Aug. 30, not far from where it was on Aug. 18 at $49.38.

I suspect that even though HOOD stock is still highly valued, it may trade sideways within a range. This will allow earnings to “catch up” to its high valuation. This implies that the market will also be patient with the company, despite the potential for SEC regulation. One reason is that HOOD is forecast to continue growing quite significantly.

The company lost $502 million in Q2 and its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was just $90 million. Moreover, the company says it expects lower trading activity in Q3, which would lead to lower revenue. That could result in an unprofitable quarter.

But even more importantly, analysts now seem to have significantly lowered their forecast for earnings going forward. For example, earlier in August I wrote that the average analyst forecast was for a loss of $1.40 in EPS for 2021 and positive 33 cents for 2022.

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