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Robinhood Stock Climbs on Betting Markets, Staking, and Equity Trading Growth
Robinhood (HOOD) shares surged up to 5% on Monday following an upbeat note from analysts at Compass Point, who raised the stock’s price target to $161 from $105. The firm cited strong revenue growth stemming from equity transactions, prediction markets, and crypto-related services, signaling optimism for the popular trading platform.
Compass Point Maintains Buy Rating
Ed Engel and his team at Compass Point highlighted that they expect Robinhood to report October trends well above 4Q expectations, maintaining their Buy rating on the stock. The analysts noted that the firm’s recent surge in revenue is supported not only by higher options and equities volumes but also by the rapid growth of Robinhood’s prediction markets, which debuted earlier this year.
Prediction markets allow traders to wager on a variety of events, ranging from sports outcomes to government policies, and even the price of Bitcoin by year-end. This unique feature has quickly become a revenue driver for the platform.
Explosive Growth in Prediction Markets
According to Engel, Robinhood is projected to generate around $20 million in revenue from prediction markets in Q3, marking a 100% quarter-over-quarter increase. Robinhood CEO Vlad Tenev shared last month that the platform has seen over 4 billion event contracts placed, with 2 billion of those in Q3 alone. Each contract generates approximately $0.01 in revenue, translating into roughly $40 million overall.
Looking ahead, Engel expects this figure to climb even higher as the NFL season progresses. He forecasts Q4 revenue from prediction markets to reach around $50 million, benefiting from a full quarter of football season activity. This surge demonstrates how Robinhood’s innovative offerings beyond traditional trading are creating new monetization channels.
Crypto Revenue on the Rise
Beyond prediction markets, Compass Point analysts also highlighted growth potential in Robinhood’s crypto business. The platform’s revenue is expected to increase due to higher trading fees and the expansion of staking services. Staking allows cryptocurrency holders to lock up their assets in exchange for rewards, similar to receiving dividends or yield, providing Robinhood with an additional revenue stream.
Engel noted, “We don’t believe the Street is accurately forecasting HOOD’s second half of 2025 or 2026 crypto revenue, which includes higher fee rates and staking revenue.” This suggests analysts see crypto trading and staking as underappreciated catalysts for Robinhood’s financial growth in the near term.
Strong Analyst Consensus
Robinhood’s stock currently enjoys a favorable analyst consensus: 20 Buy ratings, 8 Hold, and just 1 Sell. This consensus reflects optimism around the company’s diverse revenue streams and innovative offerings, despite broader market volatility in equities and crypto.
Upcoming Earnings in Focus
Investors and market watchers will closely monitor Robinhood’s earnings report next Wednesday after market close. The report is expected to shed light on the company’s ability to capitalize on equity, options, prediction market, and crypto revenues, as well as its strategies for sustaining growth in an increasingly competitive trading landscape.
The Big Picture
Robinhood’s recent stock jump and positive analyst coverage underscore the platform’s transformation from a standard brokerage into a multi-faceted fintech hub. With prediction markets gaining traction, crypto fees increasing, and staking services expanding, Robinhood appears well-positioned to diversify its revenue streams. Investors will be keen to see whether this combination of services can continue to drive strong earnings momentum through Q4 and beyond.
