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On Thursday, Barclays (LON:BARC) analyst Benjamin Budish increased the price target on Robinhood Markets (NASDAQ:HOOD) shares to $76.00, up from the previous $54.00, while maintaining an Overweight rating. The stock, currently trading near its 52-week high at $55.91, has delivered an impressive 372% return over the past year. The adjustment follows Robinhood’s fourth-quarter results, which surpassed Wall Street’s revenue and adjusted EBITDA expectations by 8% and 12%, respectively, although they were slightly below Barclays’ own projections. InvestingPro analysis indicates the stock may be overvalued at current levels.
Budish noted that Robinhood’s momentum carried into January, evidenced by robust transaction activity, growth in margin loans, and net deposits. With an InvestingPro Financial Health score of "GREAT" and a strong gross profit margin of 86.46%, the company’s fundamentals appear solid. The company’s progress in rolling out new products such as Index options, Futures, and a Gold credit card was also highlighted as a positive sign of its ongoing execution and potential for future growth.
The analyst’s outlook for Robinhood is optimistic, with the belief that the company has a lengthy trajectory of opportunities ahead. This view is bolstered by the constructive macro environment for retail trading, which is seen as favorable for the company’s business model.
Barclays’ revised estimates for Robinhood are significantly higher, prompted by the strong performance in January. The new price target of $76 reflects the firm’s confidence in Robinhood’s ability to continue its current growth trend and capitalize on the opportunities in the retail trading space.
In other recent news, KeyBanc Capital Markets has elevated its price target for Robinhood Markets to $75, following a strong fourth-quarter performance in 2024 that surpassed the firm’s revenue, EBITDA, and EPS estimates. In parallel, Robinhood has introduced options trading for its UK customers, an expansion motivated by increasing interest in alternatives to traditional stock trading. Meanwhile, Mizuho (NYSE:MFG) Securities has raised its price target for Robinhood to $65, influenced by a survey indicating high interest among Robinhood users in sports betting via the platform.
However, recent developments have seen Robinhood suspend its newly launched Super Bowl betting feature upon request from the Commodities and Futures Trading Commission (CFTC). The halt came just a day after the feature’s introduction, which allowed customers to wager on the Super Bowl game outcome. This suspension aligns with the CFTC’s request for Robinhood Derivatives, LLC to cease customer access to sports event contracts, leading to a pause in the launch of the Pro Football Championship market. Despite these setbacks, Robinhood plans to continue its collaboration with the CFTC to launch a more comprehensive event contracts platform later this year.
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