Key insights
- Cantor Fitzgerald raised its price target for Robinhood (HOOD) to $110 from $100, maintaining an Overweight rating. This optimism stems from the Rothera joint venture with Susquehanna, which is expected to allow Robinhood to capture more exchange economics from prediction markets. The firm also increased its revenue and EPS estimates for fiscal years 2026-2028, suggesting potential upside for the stock, although some analysis indicates it may be overvalued relative to its fair value.
Investing.com - Cantor Fitzgerald reiterated an Overweight rating on Robinhood Markets (NASDAQ:HOOD) and raised its price target to $110 from $100, citing the company’s Rothera joint venture with Susquehanna. The stock currently trades at $85.04, giving the company a market capitalization of $76.6 billion, with analyst consensus suggesting 18% upside potential.
The firm said the Rothera joint venture will enable Robinhood to better monetize prediction market volumes. Robinhood currently earns retail brokerage economics on prediction market volumes while third-party provider Kalshi captures the underlying exchange economics.
Cantor Fitzgerald said a large majority of these exchange economics will be recaptured by the Rothera joint venture over time. The firm raised its fiscal 2026, 2027 and 2028 revenue estimates by approximately 3%, 6% and 7% on a reported basis.
Given Robinhood’s 45% stake in Rothera, a portion of the joint venture’s economics will be attributable to partner Susquehanna through a below-the-line non-controlling interest adjustment. The net economics attributable to Robinhood shareholders imply revenue upside closer to 2%, 3% and 4% and earnings per share upside closer to 2%, 3% and 3%. The company has demonstrated strong momentum with 41.5% revenue growth over the last twelve months, reaching $4.6 billion in total revenue, according to InvestingPro data.
The new $110 price target is based on 27 times the firm’s fiscal 2027 adjusted EBITDA estimate of $3.421 billion plus a discounted cash flow analysis, equally weighted. The prior target was based on 26 times a fiscal 2027 adjusted EBITDA estimate of $3.298 billion. The company currently trades at a P/E ratio of 41, and InvestingPro analysis indicates the stock is overvalued relative to its Fair Value. For deeper insights, investors can access HOOD’s comprehensive Pro Research Report, one of 1,400+ available on InvestingPro.
In other recent news, Robinhood Markets Inc. has completed its acquisition of WonderFi Technologies Inc. for approximately C$250 million. This acquisition was finalized through a statutory plan of arrangement, with Robinhood acquiring all outstanding common shares of WonderFi at C$0.36 per share in cash. Additionally, Robinhood is facing a potential Supreme Court review over a lawsuit related to its initial public offering. The U.S. Supreme Court has asked for input from the administration on whether to hear Robinhood’s appeal to dismiss the lawsuit, which accuses the company of misleading investors.
In the cryptocurrency sector, stocks related to blockchain and cryptocurrencies have experienced declines. Bitcoin has continued its losing streak, reaching its lowest levels since October 2024, with a recent drop of 4.4% to $60,805.85. Ether also saw a significant decline, falling 10% to approximately $1,591. Bank of America analysts have noted that the lines between sports betting, speculation, cryptocurrency, and financial markets are becoming increasingly blurred. They foresee potential growth opportunities for sports betting operators as perpetual futures and gamification become areas of innovation.
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