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Investing.com - Compass Point has reiterated its Buy rating and $105.00 price target on Robinhood Markets (NASDAQ:HOOD) stock, citing the effectiveness of the company’s promotional strategy. The stock, which has surged 168% year-to-date and currently trades at a P/E ratio of 51.37, appears overvalued according to InvestingPro’s Fair Value model.
The research firm addressed concerns about monthly deposit volatility following promotional campaigns, suggesting this pattern reflects Robinhood’s intentional marketing approach rather than weakening organic demand. Compass Point noted the company will continue launching new promotions as long as it sees attractive lifetime value to customer acquisition cost ratios. With a market capitalization of $92.37 billion and impressive revenue growth of 59.38% over the last twelve months, InvestingPro analysis reveals 8 additional key insights available to subscribers.
Robinhood’s cryptocurrency business shows growth potential, with fee rates increasing for seven consecutive quarters, including continued expansion in July. Since launching staking in June, users have already staked $750 million in assets, which could generate approximately $10 million in annualized EBITDA once the company begins accruing staking fees in October.
The firm highlighted that if users stake 50-60% of their $6 billion in stakable assets, this represents a near-term $30-40 million EBITDA opportunity. Additionally, Robinhood has begun routing retail orders to Bitstamp, allowing it to capture fees on both sides of each trade.
Compass Point expects institutional trading to increase throughout 2026, potentially providing approximately $175 million in incremental revenue for Robinhood.
In other recent news, Robinhood Markets reported impressive second-quarter 2025 financial results, significantly surpassing analysts’ expectations. The company achieved earnings per share (EPS) of $0.42, which was notably higher than the forecasted $0.30, and generated revenue of $989 million, exceeding the anticipated $908.32 million by 8.88%. In response to these strong earnings, Citizens JMP raised its price target for Robinhood to $130 from $125, maintaining a Market Outperform rating. The firm highlighted Robinhood’s adjusted EBITDA of $549 million, marking an 82% year-over-year increase.
Cantor Fitzgerald also raised its price target for Robinhood to $118 from $100, citing the company’s strong second-quarter performance, with revenue, adjusted EBITDA, and EPS significantly exceeding expectations. Additionally, Cantor Fitzgerald noted that Robinhood’s third quarter began strongly, with net deposits in July surpassing $6 billion. Mizuho (NYSE:MFG) increased its price target to $120 from $99, maintaining an Outperform rating based on Robinhood’s accelerating growth in funded accounts.
These developments reflect a positive outlook from analysts regarding Robinhood’s recent performance and future prospects.
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