Robinhood(US:HOOD) ZACKS·2025-12-29 13:16Core Insights - Robinhood Markets (HOOD) has experienced significant growth in 2025, highlighted by its inclusion in the S&P 500, new product launches, a strong crypto cycle, and market volatility, leading to positive investor sentiment [1] Performance Overview - Over the past year, HOOD shares have surged by 208.6%, outperforming the industry average of 40%, with peers Charles Schwab (SCHW) and Interactive Brokers (IBKR) gaining 37.8% and 47.9%, respectively [2] Growth Drivers for 2026 - Product Launches & Global Expansion: Robinhood is enhancing growth through innovative product offerings and global market entry, aiming to establish itself as a next-generation fintech ecosystem [6] - Major Product Introductions: Key launches in 2025 include Robinhood Cortex (an AI assistant), the Legend platform (advanced trading features), and Robinhood Social (a verified trading community) [7][8] - Banking Services: The introduction of banking services and a Gold credit card aims to position Robinhood as a digital banking alternative, enhancing user engagement and monetization [8] - Global Initiatives: Robinhood is pioneering tokenized U.S. stocks and ETFs in 31 EU and EEA countries, with plans for further global expansion through acquisitions [9] - Diversification of Revenue Streams: The company has reduced its reliance on transaction-based revenues from 75% in 2021 to approximately 55% in the first nine months of 2025, expanding into futures, banking, and wealth management [11] - Focus on Crypto: Robinhood's revenue from crypto surged by 154% in 2025, supported by acquisitions and expansion efforts, with plans to enhance its crypto offerings and pursue regulatory licenses in the EU [10][16][18] Financial Outlook - Earnings Estimates: The Zacks Consensus Estimate for HOOD's earnings indicates year-over-year growth of 82.5% for 2025 and 20.6% for 2026, with revenue growth estimates of 51.9% and 22%, respectively [24][27] - Sales Projections: The consensus estimates for 2025 and 2026 revenues are $4.48 billion and $5.47 billion, reflecting significant growth compared to previous years [29] - Valuation Metrics: HOOD currently trades at a price/tangible book (P/TB) ratio of 13.54X, significantly higher than the industry average of 3.23X, indicating a premium valuation [30][31] Strategic Positioning - Robinhood's transformation from a brokerage to a diversified financial services platform is underscored by its rapid product innovation and global expansion efforts [32][33] - The company's strategic acquisitions, such as Bitstamp and TradePMR, are expected to bolster its growth potential in 2026 [33]