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Robinhood stock pops 5% as analyst raises price target, citing explosive growth in prediction markets
Yahoo Financeยท 2025-10-27 16:37
Core Viewpoint - Robinhood's stock experienced a 5% increase following an upgrade from Compass Point, which raised the price target from $105 to $161, driven by anticipated revenue growth from equity transactions, prediction markets, and crypto fees [1]. Revenue Growth - The increase in revenue is attributed to higher volumes in options and equities, as well as significant growth in prediction markets launched earlier this year [2]. - Forecasts indicate that Robinhood will generate approximately $20 million in revenue from prediction markets in Q3, representing over 100% quarter-over-quarter growth [3]. - The trading platform has seen over 4 billion event contracts for predictions, with more than 2 billion contracts executed in Q3 alone, leading to an estimated revenue of around $40 million [3]. Future Projections - Expectations for Q4 predict revenue from prediction markets to reach approximately $50 million, bolstered by a full quarter of NFL season activity [4]. - Crypto revenue is also projected to grow due to increased fees and staking services, with analysts suggesting that current forecasts for 2025 and 2026 do not accurately reflect potential revenue from these areas [4]. Stock Performance - Robinhood is set to disclose earnings next Wednesday, with current ratings showing 20 Buy, 8 Hold, and 1 Sell [5]. - The stock has surged over 250% year-to-date and was recently added to the S&P 500 [5].