TLDR
- Robinhood shares rose 3.7% in recent trading, with the stock reaching $40.67
- Compass Point initiated coverage with a “Buy” rating and $61 price target, suggesting 50% upside
- Q4 crypto trading revenue surged 700% year-over-year to $358 million
- Analysts maintain positive outlook with consensus “Moderate Buy” rating and $61.29 average price target
- Regulatory environment for crypto appears to be improving after SEC closed investigation without action
Robinhood Markets has been gaining significant attention from investors and analysts alike as its stock price climbs and its cryptocurrency business expands.
The popular trading platform recently saw its shares rise 3.7% during mid-day trading, reaching $40.67 after previously closing at $39.24.
This upward movement comes as multiple analysts express optimism about the company’s future prospects.
Compass Point recently initiated coverage of Robinhood with a “Buy” rating and set a price target of $61, representing potential upside of approximately 50% from current levels.
The investment bank highlighted several growth opportunities for Robinhood in its research note. Analysts estimated that the company could generate $665 million from cross-selling to existing U.S. customers, including $150 million from cryptocurrency staking services alone.
Compass Point isn’t the only firm bullish on Robinhood’s prospects. JPMorgan Chase raised its price target from $39 to $45, while maintaining a “neutral” rating on the stock.
JMP Securities took an even more optimistic stance, boosting its target from $60 to $77 and reiterating a “market outperform” rating. Similarly, Mizuho increased its target from $60 to $65 with an “outperform” rating.
Overall market sentiment remains favorable toward Robinhood. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” with an average price target of $61.29.
Financial Performance
Robinhood’s recent financial performance has been particularly impressive in its cryptocurrency segment. The company reported a stunning 700% surge in cryptocurrency trading revenue for the fourth quarter, reaching $358 million compared to just $45 million in the same period a year earlier.
This crypto boom helped Robinhood achieve record profitability. Cryptocurrency now accounts for more than one-third of the company’s total transaction-based revenue, which grew over 200% to $672 million in the quarter.
The strong performance in crypto trading pushed Robinhood’s total Q4 revenue up 115% year-over-year to $1.01 billion. Net income soared more than tenfold during this period.
Robinhood’s cryptocurrency business appears poised for further growth amid an improving regulatory landscape. The U.S. Securities and Exchange Commission recently closed an investigation into Robinhood’s crypto arm without seeking enforcement action, removing a potential obstacle to expansion.
Compass Point analysts noted that Robinhood’s “crypto business has underearned for its size after taking a cautious approach to U.S. product expansion.” They pointed out that the company’s crypto revenue was “just 19% of exchange giant Coinbase’s non-interest revenue,” suggesting room for growth.
The analysts also highlighted that Robinhood has already developed extensive infrastructure for non-U.S. users, positioning it to “launch additional crypto services in the U.S. with limited additional investment.”
Prediction Market Launch
Adding to its product lineup, Robinhood recently launched a prediction market allowing users to bet on this year’s NCAA basketball tournament, known as March Madness. This expansion into new offerings could provide additional revenue streams.
Robinhood’s stock has experienced volatility in recent weeks amid broader market concerns about potential trade wars under the Trump administration. Morgan Stanley has cautioned that companies with high foreign revenue exposure, particularly in technology, materials, and energy sectors, could be more vulnerable to tariff uncertainties.
Despite these macroeconomic headwinds, Robinhood shares have performed well, closing up more than 6% to trade just over $42 per share on Wednesday amid broader gains in crypto stocks and other risk-oriented assets.
The company continues to attract institutional investment, with several large investors modifying their holdings. Company insiders have also been active, with CEO Vladimir Tenev selling 750,000 shares at an average price of $39.16, totaling approximately $29.37 million in January.
Looking ahead, sell-side analysts expect Robinhood Markets to post earnings of $1.35 per share for the current fiscal year. The company currently has a market capitalization of approximately $37.90 billion, with a price-to-earnings ratio of 27.26.
