With its no-fee structure and easy-to-use trading experience, the financial services platform Robinhood has garnered massive popularity among millennial and Gen Z investors. Quality Robinhood stocks Visa Inc. (V) and Pfizer Inc. (PFE) present promising long-term investment opportunities for the long-term. Before delving into the fundamentals of these stocks, let us discuss more about the Robinhood platform.
Robinhood Markets, Inc. (HOOD) is a financial technology company primarily known for its trading services platform that offers commission-free stock, ETF, options, and cryptocurrency trades. As of December 31, 2022, the company has approximately 11.4 million monthly active users and $62 billion in assets under custody. It has net cumulative funded accounts of 23 million.
HOOD began as an innovative disruptor in the brokerage sector. Since then, its brand has garnered immense popularity among tech-savvy and young traders, primarily due to its no-fee model and streamlined, approachable, easy-to-navigate trading interface. The platform’s biggest real differentiator is no-fee trading, making HOOD one of the most popular brokerage firms in the United States.
Moreover, after delivering a 25-basis-point rate hike and taking the federal funds rate to 4.75%-5%, the Fed is expected to deliver only one more hike this year. Although Fed Chair Jerome Powell thinks that "it's too soon to tell" how much the stricter bank lending will hobble the economy, he added that the Fed "may have less work to do."
Amid this, given the immense popularity of stocks listed on the Robinhood platform, it could be wise to buy and hold onto fundamentally sound Robinhood stocks, V and PFE, for the long term to garner significant returns.
Let’s have a closer look at these featured stocks:
Visa Inc. (V)
V is a global payments technology enterprise that operates VisaNet, a transaction processing network facilitating the authorization, clearing, and settlement of payment transactions worldwide. The company also offers Cybersource, a payment management platform, and risk and identity solutions.
On February 8, 2023, V announced new initiatives for Small and Micro Businesses (SMBs) to enable them to adopt digital payments, refine their essential processes, and economize on technology investments. By launching Visa SavingsEdge, V could help business cardholders to derive additional benefits from their Visa Business card while reducing expenditures from nearly 60 merchants, enhancing its market competitiveness.
Additionally, on December 14, 2022, V pledged to invest $1 billion over the next five years to support Africa’s economic growth by advancing innovative, inclusive, and resilient economies. The company’s sustained investments should facilitate greater access to digital payments, thereby expanding financial services for individuals and businesses.
In the first quarter of fiscal 2023 that ended December 31, 2022, V’s net revenues increased 12.4% year-over-year to $7.94 billion, while its operating income rose 6.6% from the year-ago value to $5.09 billion. Furthermore, the company’s non-GAAP net income and non-GAAP EPS grew 17.4% and 20.4% year-over-year to $4.58 billion and $2.18, respectively.
Analysts expect V’s revenue to increase 10.2% year-over-year to $32.29 billion for the fiscal year ending September 2023. The company’s EPS for the current year is expected to rise 13% from the previous year to $8.47. Moreover, V surpassed its consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
The stock has gained 21% over the past six months to close the last trading session at $222.59.
V’s solid fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
V has an A grade for Quality and a B for Stability and Sentiment. It ranks #4 in the 46-stock Consumer Financial Services industry.
In addition to the POWR Ratings I’ve just highlighted, you can see V’s ratings for Value, Growth, and Momentum here.
Pfizer Inc. (PFE)
PFE is a global biopharmaceutical company that researches, produces, and distributes medicines and vaccines in various therapeutic fields. It also operates in the contract manufacturing sector, catering to the needs of wholesalers, retailers, hospitals, government agencies, pharmacies, and disease control and prevention centers.
On March 13, 2023, PFE and Seagen Inc. (SGEN) announced a merger agreement under which PFE would acquire SGEN for $43 billion. SGEN is a global biotech company that develops and commercializes transformative cancer treatments. The acquisition would strengthen PFE’s position in oncology and contribute significantly to its near and long-term financial objectives.
On January 6, PFE partnered with Gero to utilize their machine learning platform to identify potential therapeutic targets for fibrotic diseases using human-based data, which could aid the company in advancing its therapeutic targets and undertaking further preclinical and clinical development.
PFE’s revenues increased 1.9% year-over-year to $24.29 billion in the fourth quarter that ended December 31, 2022. Its income from continuing operations rose 39.7% year-over-year to $5 billion. Moreover, adjusted net income attributable to PFE common shareholders grew 44.2% from the prior year’s period to $6.55 billion, while its adjusted EPS rose 44.3% year-over-year to $1.14.
The consensus revenue estimate of $71.51 billion for the fiscal year ending December 2024 reflects a 3.4% year-over-year improvement. Likewise, the consensus EPS estimate of $3.91 for the same year indicates a 15.2% rise year-over-year. Furthermore, PFE surpassed its consensus EPS estimates in all four trailing quarters.
Shares of PFE marginally gained intraday to close the last trading session at $40.18.
PFE’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
The stock has an A grade for Value and a B for Quality. Within the Medical - Pharmaceuticals industry, it ranks #27 out of 167 stocks.
Beyond what we stated above, we also have PFE ratings for Growth, Stability, Sentiment, and Momentum. Get all PFE ratings here.
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V shares were trading at $220.76 per share on Friday afternoon, down $1.83 (-0.82%). Year-to-date, V has gained 6.47%, versus a 3.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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