Robinhood(HOOD.US)The bull market story is not over! The growth narrative of America's "internet celebrity broker" has gained recognition on Wall Street

TipRanks reports that the globally popular American “internet celebrity broker” Robinhood Markets, Inc. (HOOD.US) has been included on the stock lists of several Wall Street institutions as a “must-buy and hold long-term” stock for the next three years. Despite senior analyst Craig Siegenthaler from Bank of America lowering the target price from $147 to $122, he maintains a “buy” rating on the stock. As of last Friday’s US stock market close, Robinhood’s share price fell 4.53% to $75.85. Bank of America’s latest target price suggests a bullish stance even after the downgrade.

It is noteworthy that Bank of America has recently been actively adjusting its earnings per share (EPS) expectations for brokerage firms, asset managers, and international securities exchanges, all of which have recently reported earnings and are covered by Bank of America’s analyst team. The downgrade of Robinhood mainly stems from adjustments in earnings forecasts for the overall brokerage and asset management sectors. After reviewing the earnings projections for core brokerages including Robinhood, Bank of America believes that future EPS paths should be slightly lower than previously thought, leading to a moderate reduction in the target price. However, they remain confident in the company’s long-term growth potential, not dismissing its strong growth prospects.

Bank of America’s analysts believe Robinhood’s fundamental growth drivers still exist (such as large platform assets, retail-driven trading revenue, and significant net interest income growth), but recent macroeconomic conditions and earnings rhythm adjustments require more cautious performance expectations in valuation settings.

In its recent earnings report, Robinhood announced its financial results for Q4 2025 and fiscal year 2025 on February 10. The financials show that the company’s quarterly total net revenue increased significantly by 27% year-over-year to $1.28 billion; trading-related revenue grew 15% YoY to $776 million, and net interest revenue increased 39% YoY to $411 million. The report also indicated that total platform assets surged 68% YoY to $324 billion, mainly driven by continuous net deposits, acquisitions, and substantial increases in stock asset valuations.

Robinhood Markets, Inc. operates a financial services platform primarily targeting retail investors worldwide. The platform allows users to invest in ETFs, options, cryptocurrencies, American Depositary Receipts (ADRs), stocks, and gold, among other assets. It also operates and owns an online digital currency trading platform.

Robinhood’s stock skyrocketed 200% in 2025

Robinhood mainly provides online brokerage and electronic trading services, offering a trading platform for retail investors to trade stocks, options, ETFs, cryptocurrencies, index options, futures, and prediction markets. The company has expanded into diverse product lines including crypto wallets, wealth management, credit cards, and banking services. Founded on a “zero commission” trading model, Robinhood quickly gained user base and market attention through its young customer demographic and gamified trading experience. Its core revenue streams include trading commissions, net interest income, cryptocurrency trading revenue, and subscription services.

The sharp rise in Robinhood’s stock in 2025 was driven by multiple growth factors. First, the company’s financial performance in FY2025 improved markedly, with sustained high revenue growth and profitability supported by active trading, expanding platform assets, and increased user engagement, helping it shed its previous loss-making label. Its revenue structure performed strongly in core areas like stock, options, and crypto trading, while new businesses—such as prediction markets similar to Polymarket and tokenized trading—also boosted market expectations. The over 200% stock price increase in 2025 was further fueled by retail investor enthusiasm, driven by the continued US stock bull market, as well as a rebound in the crypto market and overall bullish environment in US equities, leading to a broad increase in trading volume.

However, since 2026, the stock has experienced a significant decline, falling over 30% this year, mainly reflecting a reassessment of its growth pace and profitability sustainability. On one hand, recent earnings reports showed a sharp decline in crypto revenue, which had been a key growth driver in 2025, leading to lowered expectations for future growth. On the other hand, although overall profitability remains solid, some analysts believe that the current valuation overestimates future growth prospects. Short-term resistance is caused by macroeconomic volatility due to tariffs and geopolitical tensions, as well as fluctuations in retail trading activity and uncertainties around crypto trading revenue. Overall, the 2025 surge and 2026 correction reflect a dynamic tug-of-war between investor sentiment and Robinhood’s fundamentals.

Wall Street consensus remains bullish

According to TipRanks, the broader Wall Street consensus is optimistic. Of 21 analysts covering Robinhood, 19 give a “buy” rating, 2 recommend “sell,” and 3 are on hold. Target prices range from about $100 to $180, with an average of approximately $130.10 over 12 months—meaning even the lowest target exceeds the current trading price.

This latest consensus highlights that, despite some recent downward revisions in 12-month target prices, most institutions remain optimistic about Robinhood’s medium- to long-term fundamentals, believing its revenue and operating profit growth momentum remains strong (e.g., Wall Street consensus expects FY2025 EPS to increase by 85.3%). Additionally, expanding its platform offerings (such as prediction markets) could help mitigate volatility in crypto trading.

For example, Wolfe Research recently upgraded Robinhood to “Outperform,” believing that revenue growth in prediction markets could partially offset weakness in other areas and that prediction markets as a new revenue source are sustainable. Bank of America analyst Craig Siegenthaler continues to favor the company’s long-term growth path, citing platform asset growth and business expansion as supportive factors, and expects continued increases in trading and net interest income. Meanwhile, Goldman Sachs recently lowered its target price from $130 to $111 but maintained a “buy” rating, indicating confidence in the company’s long-term growth but emphasizing the need for more cautious valuation reflecting earnings forecasts.

Prediction markets have become globally popular since the 2024 US presidential election

Since the end of 2024, prediction markets have become a worldwide craze. During the US presidential election, nearly everyone was betting real money on platforms like Polymarket on who would win—Trump or Harris—marking the arrival of an era where “anything can be bet on.”

What are “prediction market companies”? Essentially, they are trading platforms that turn real-world events into tradable binary contracts: contracts are usually settled as “yes/no” (e.g., whether an event occurs), with prices interpreted as market-implied probabilities. In the US, these contracts are often packaged as regulated derivative “event contracts.”

Undoubtedly, the entry of major investor channels like Robinhood, with its large user base, into related contract trading, along with traditional giants like ICE and CME entering through investments or new platforms, has significantly boosted the credibility and user reach of the entire prediction industry.

Prediction markets, in the form of “event contracts,” have penetrated sports betting in some states even without legal sports gambling, attracting trading volume and becoming an important new revenue source for platforms like Kalshi. This has also sparked regulatory debates at the state level. More significantly, some Wall Street investment firms and professional trading funds are using prediction markets to hedge or bet on macroeconomic and corporate event probabilities (such as Federal Reserve monetary policy or M&A outcomes), because the binary structure of these contracts offers a more “pure” expression of probabilities.

Analysts from Citizens Financial Group Inc. stated in a report that prediction market companies like Polymarket could see their total revenue grow to five times the current market size by 2030, surpassing $10 billion in revenue.