Shares of Robinhood (HOOD) rose as much as 5% on Monday as analysts at Compass Point raised their price target on the stock to $161 from $105, citing revenue growth from stock trading, prediction markets and cryptocurrency fees.
Compass Point analyst Ed Engel and his team said in a note that they expect the company to “reveal October trends well above Q4 expectations.” They maintained their Buy rating on Robinhood stock.
In addition to increased revenue from higher stock and options volumes, they pointed to the explosive growth of the platform’s prediction markets launched earlier this year. The service allows traders to bet on the outcome of any major event, from the likely winner of a football match to how long the government shutdown will last or where the price of bitcoin (BTC-USD) will be by the end of the year.
“We expect HOOD to generate approximately $20 million in revenue from prediction markets in the third quarter, up more than 100% quarter-over-quarter,” Engel said.
Robinhood CEO Vlad Tenev revealed last month on X that event contracts for predictions surpassed 4 billion, with more than 2 billion of those contracts in the third quarter alone. Analysts note that the trading platform earns $0.01 per contract, implying approximately $40 million in revenue.
Engel expects that number to increase even more given the NFL football season underway.
“We model HOOD’s prediction for Q4 reaching ~$50 million along with a full quarter of the NFL season,” he said.
Engel also notes that cryptocurrency revenue will grow driven by higher fees and “staking” services. “Staking” allows token holders to lock up their digital assets while receiving rewards for them, similar to a dividend or yield.
“We do not believe the Street is accurately forecasting HOOD’s crypto revenue for the second half of 2025 or 2026, which includes higher fee rates and staking revenue,” Engel wrote.
Robinhood will release its results next Wednesday after the close. The stock has 20 Buy, 8 Hold, and 1 Sell ratings.
The stock is up more than 250% so far this year. Robinhood also entered the S&P 500 (GSPC) last month.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X in @ines_ferre.
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