StoneX Issues Buy Rating on Robinhood with Strong Upside Potential
StoneX Financial has started coverage of Robinhood with a Buy rating and a $170 price target. The target suggests about 45% upside from the stock’s Tuesday close of $117.34. Analyst Mark Palmer noted that nearly every key operating metric at the company is accelerating. He pointed to new growth engines beyond traditional retail trading.
Robinhood Chain Drives Layer 2 Revenue Growth
Palmer highlighted the launch of Robinhood Chain, the company’s Ethereum Layer 2 network that went live on mainnet on July 1. The chain has collected more gas fees than any other Ethereum Layer 2 over a recent 24-hour period. Daily fees hit roughly $4.59 million by September 3, with annualized revenue near $39 million as of late August. StoneX models the chain could reach $980 million in revenue by fiscal 2029 at an 85% margin.
Prediction Markets Emerge as Major Revenue Pillar
Prediction markets form another key growth driver. In the second quarter, Robinhood processed 13.6 billion event contracts and generated about $156 million in related revenue, up 50% from the prior quarter. Over 5 billion contracts traded during the World Cup alone. On Tuesday the company announced equity stakes and partnership deals with Crypto.com and OG.com to expand its prediction markets offering.
Broader Financial Performance and Analyst Consensus
Robinhood’s overall second-quarter revenue rose 32% year-over-year to $1.31 billion, even as cryptocurrency revenue declined 38%. Crypto now accounts for just 8% of net revenues. Earlier this week Bernstein analysts also kept an Outperform rating with a $160 target, signaling continued confidence in the stock’s growth story.
