Trading platform company Robinhood Markets HOOD saw shares trade higher Wednesday after market close on the heels of data showing higher February trading and account activity.
Here’s what analysts are saying about the latest for the company and how Robinhood could be a cryptocurrency and Bitcoin BTC/USD play:
- Bernstein analyst Gautam Chhugani initiates Robinhood with an Outperform rating and $30 price target.
- Goldman Sachs analyst Will Nance reiterates a Neutral rating and has a $13 price target.
Bernstein: A cryptocurrency cycle over 2024 to 2025 may not be fully realized for Robinhood stock, Chhugani said.
“We expect crypto market cap to reach $7.5 trillion vs. $2.6 trillion today,” Chhugani said. This could lead to Robinhood growing its cryptocurrency-related revenue “by 9-fold.”
“HOOD’s full suite crypto offering within a regulated broker platform is in a sweet spot, given its captive base of 11 million active traders, with strong fit to trade crypto (young, active, self-directed),” the analyst added.
Other traditional brokers are still shy to offer cryptocurrency trading, Chhugani says.
“We believe, the crypto market is amidst unprecedented institutional adoption. We expect continued success of the Bitcoin ETF and a likely launch of an ETH ETF within 12 months.”
Chhugani said Robinhood is a “2-year cyclical trade.” The $30 price target would represent Robinhood valued at 7.8x 2025 revenue estimates. The analyst shows that Coinbase Global COIN trades at 14.2x 2024 revenue and 13.4x 2025 revenue estimates. The price target would put Robinhood more in line with cryptocurrency and trading platform companies.
The analyst said Robinhood could be benefitting from strong equity markets and all-time highs for cryptocurrencies like Bitcoin.
“HOOD’s February metrics came in ahead of our expectations,” Nance said.
The analyst said Robinhood showed higher assets under custody, which comes as the prices of Bitcoin and other assets increased in February. Robinhood reported 23.6 million funded customers at the end of February, which was up around 130,000 from January.
“Putting it all together, while these results are likely somewhat baked in given the recent strength in shares and broader market trends we expect shares to see continued support as equity and crypto markets continue to outperform.”
HOOD Price Action: Robinhood shares are up 5% to $18.09 on Thursday versus a 52-week trading range of $7.91 to $19.20. Shares of Robinhood are up 100% over the last year.