Robinhood (HOOD) stock jumped as much as 5% on Monday as analysts at Compass Point raised their price target on shares to $161 from $105, citing revenue growth from equity transactions, prediction markets, and crypto fees.
Compass Point analyst Ed Engel and his team said in a note that they expect the company "to disclose October trends pacing well above 4Q expectations." They maintained their Buy rating on Robinhood shares.
Apart from increased revenue on higher options and equities 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 game to how long the government shutdown will last or where the price of bitcoin will be by the end of the year.
"We forecast HOOD generating ~$20m in revenue from prediction markets in 3Q, which is up over 100% QoQ," Engel said.
Robinhood CEO Vlad Tenev disclosed last month on X that event contracts for predictions topped 4 billion, with over 2 billion of those contracts placed 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 go even higher, given that the NFL's season is underway.
"We model HOOD's 4Q prediction reaching ~$50m alongside a full quarter of NFL season," he said.
Engel also points out that crypto 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 don't believe the Street is accurately forecasting HOOD's 2H25 or 2026 crypto revenue, which includes higher fee rates and staking revenue," Engel wrote.
Robinhood will disclose earnings next Wednesday after the close. The stock has 20 Buy ratings, eight Hold, and one Sell.
The stock has jumped more than 250% year to date. Robinhood also entered the S&P 500 (^GSPC) last month.
