TLDR
- Robinhood stock jumped 5% on Monday after Compass Point raised its price target from $105 to $161, maintaining a Buy rating on shares.
- Prediction markets launched earlier this year are driving explosive growth, with analysts forecasting $20 million in third quarter revenue and $50 million in fourth quarter revenue from the platform.
- CEO Vlad Tenev disclosed that event contracts for predictions topped 4 billion, with over 2 billion placed in third quarter alone at $0.01 per contract.
- CICC initiated coverage with an Outperform rating and $155 price target, highlighting Robinhood’s 26.5 million customers and $278.6 billion in client assets.
- The stock has surged over 250% year to date and entered the S&P 500 last month, with earnings scheduled for release next Wednesday after market close.
Robinhood stock jumped 5% on Monday following a price target increase from Compass Point. The firm raised its target to $161 from $105 while keeping a Buy rating on shares.
Analyst Ed Engel and his team cited revenue growth from multiple sources. Equity transactions, prediction markets, and crypto fees are all contributing to the upward revision.
The prediction markets platform launched earlier this year has become a major revenue driver. Traders can bet on outcomes ranging from football games to government shutdowns to bitcoin price movements.
Compass Point forecasts $20 million in prediction market revenue for the third quarter. That represents growth of over 100% from the previous quarter.
CEO Vlad Tenev shared data on X last month showing event contracts topped 4 billion. More than 2 billion of those contracts were placed in the third quarter alone.
The platform earns $0.01 per contract. That implies approximately $40 million in revenue based on the disclosed contract volume.
Engel expects the number to climb higher in the fourth quarter. The NFL season is currently underway, which drives betting activity.
Prediction Market Revenue Could Hit $50 Million
The analyst models fourth quarter prediction market revenue at around $50 million. This includes a full quarter of NFL season activity.
CICC also initiated coverage on Robinhood on Monday. The firm gave an Outperform rating with a $155 price target.
CICC highlighted Robinhood’s position in digital asset trading services. The platform has launched digital asset-based ETFs, staking services, and tokenized products in Europe.
The company reported 26.5 million customers at the end of the first half of 2025. Total client assets reached $278.6 billion.
Per-customer profit surged 282% year-over-year to $70 in 2024. Strong products and improved operating efficiency drove the increase.
Crypto Revenue Growth Expected
Engel noted that crypto revenue will continue growing. Higher fees and staking services are the main drivers.
Staking allows token holders to lock up digital assets while receiving rewards. The process is similar to earning dividends or yield.
“We don’t believe the Street is accurately forecasting HOOD’s 2H25 or 2026 crypto revenue,” Engel wrote. The forecast includes higher fee rates and staking revenue.
Compass Point’s third quarter EBITDA forecast sits 6% above consensus estimates. The firm expects Robinhood to disclose October trends pacing well above fourth quarter expectations.
When annualizing third quarter forecasts, transaction revenue sits only 2% below consensus estimates for 2026. This suggests potential upside to longer-term expectations.
The stock trades at a premium valuation of 62 times 2026 estimated earnings. Compass Point remains comfortable with the Buy rating as long as revenue and EBITDA exceed expectations.
Robinhood stock has 20 Buy ratings, eight Hold ratings, and one Sell rating. The company will report earnings next Wednesday after market close.
The stock has climbed more than 250% year to date. Robinhood entered the S&P 500 last month.
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