There's no question that quite a few popular Robinhood stocks are ridiculously overvalued. If Wall Street analysts are right, at least three of them could plunge close to 70% or more from their current levels.
But not every highly traded stock on the platform is expensive. Here are three Robinhood stocks that still look like bargains right now.
Bank of America
Bank of America (BAC 0.95%) ranks as the only bank stock among the 100 most popular Robinhood stocks. It's also Warren Buffett's favorite bank stock. While Buffett's Berkshire Hathaway has reduced its positions in other bank stocks, it has held on to its BoA shares.
The S&P 500 currently trades at more than 21 times expected earnings; Bank of America shares trade at less than 16 times. That's actually a little higher than several other big banks' forward earnings multiples.
However, BoA appears to be a bargain using other key valuation metrics. The stock trades at only 1.27 times its book value. Its price-to-earnings-growth ratio (or PEG) stands at a low 1.25.
Bank of America has invested heavily in technology in recent years, which has helped improve the company's overall efficiency and made its products and services more attractive to consumers. I think the stock is well positioned to deliver solid long-term returns.
Facebook (FB 1.83%) isn't the most popular social media stock on Robinhood. It's one spot below Twitter and lags well behind Microsoft (which owns professional-networking site LinkedIn) and Snap. But Facebook is the cheapest of the group.
Its shares trade at less than 23 times expected earnings. Sure, that might not seem like much of a bargain. But Wall Street analysts project that Facebook will be able to deliver strong earnings growth over the next few years. As a result, its PEG ratio of 0.98 looks very attractive.
Could the moves made by Apple and Alphabet to improve user privacy hurt Facebook's growth prospects? Maybe. These changes limit companies' ability to track user data across apps and websites. Facebook should still be able to provide ways for advertisers to precisely target specific types of customers, though.
The company could also open up new growth opportunities by moving further into the tech hardware arena. Facebook is reportedly developing a smartwatch that will include support for fitness and health apps. It's also set to launch augmented-reality glasses later this year.
Robinhood users really like quite a few biotech stocks. But only two big pharma stocks are included in the top 100 on the trading platform, with Pfizer (PFE -0.15%) ranking the higher of the two.
Pfizer certainly looks like a bargain using one important metric. Its shares trade at less than 11 times expected earnings. That seems especially inexpensive considering the company's improving growth prospects.
The merger of the Upjohn unit with Mylan in November took a big weight off of Pfizer. Older drugs with declining sales such as Lyrica will no longer hurt the company's growth. As a result, Pfizer expects to deliver risk-adjusted annual revenue growth of around 6% and adjusted EPS growth of at least 10% over the next few years.
But that projection doesn't include sales of COVID-19 vaccine BNT162b2. The vaccine should generate revenue of well over $18 billion in 2021, with Pfizer and partner BioNTech splitting profits equally. BNT162b2 is likely the reason Robinhood investors are interested in Pfizer. And it's a pretty good reason to consider the inexpensive big pharma stock.