David Moadel
5 min read
Quick Read
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Morgan Stanley upgraded Robinhood to Overweight with a $150 price target as prediction market revenue hit $156M, surpassing crypto.
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Robinhood’s crypto trading volume fell 38% year over year, but expansion into banking, retirement, and prediction markets offsets that reliance.
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Interactive Brokers posted 34% account growth, 36% higher daily revenue trades, and a 67% jump in margin loans in Q2.
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Robinhood Markets (NASDAQ:HOOD) stock is rallying 11% to $118.88 in Thursday trading as a series of bullish analyst calls reinforces the case that Robinhood is becoming more than a traditional retail brokerage. Webull (NASDAQ:BULL) stock is climbing 7% to $9.62, while Interactive Brokers (NASDAQ:IBKR) stock is gaining 4% to $92.44, giving the broader online-brokerage group a strong showing.
Robinhood’s latest boost follows Morgan Stanley’s September 1 upgrade of Robinhood stock to Overweight from Equal Weight, accompanied by a price-target increase to $150 from $124. Morgan Stanley also raised its earnings estimates for Robinhood as analysts pointed to prediction markets, growing customer assets and the company’s expanding collection of financial products as additional sources of growth.
Robinhood’s Growth Story Is Expanding
Robinhood’s second-quarter results provided plenty of evidence for the bullish argument, with revenue reaching a record $1.31 billion and net income climbing 48% year over year to $573 million. Robinhood Markets also reported 28.5 million funded customers and $355 billion in total platform assets as of July 31, while its 12-month net-deposit growth rate stood at 25%.
Robinhood’s prediction-market business is particularly important because event-contract revenue reached $156 million in Q2, surpassing cryptocurrency revenue of $100 million. Robinhood also reported that event contracts traded increased more than tenfold year over year to 13.6 billion, suggesting that prediction markets could become an increasingly important part of the platform’s economics.
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