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On Monday, Mizuho (NYSE:MFG) Securities increased its price target for Robinhood Markets (NASDAQ:HOOD) shares to $65.00 from the previous target of $60.00, while maintaining an Outperform rating on the stock. The new target reflects the stock’s strong momentum, with shares up over 380% in the past year and currently trading near its 52-week high of $55.98. This adjustment comes after the firm conducted a survey among Robinhood users to gauge their interest in using the trading app for sports betting.
The survey included 107 Robinhood users and revealed that two-thirds of the participants are already engaging with mobile sports betting services such as DraftKings (NASDAQ:DKNG) and FanDuel. Additionally, a significant 78% expressed interest in the possibility of placing sports bets through the Robinhood platform. These findings are particularly relevant as Robinhood had hinted at exploring sports event contracts during its Analyst Day in 2024. According to InvestingPro data, the company’s revenue grew 35.74% in the last twelve months, suggesting strong execution of its growth initiatives.
Earlier in the week, Robinhood had briefly introduced a feature related to sports betting for the Super Bowl event. However, the company had to retract the service following remarks from the Commodity Futures Trading Commission (CFTC). Want deeper insights? InvestingPro subscribers have access to 14 additional ProTips and comprehensive financial metrics for Robinhood.
The revised estimate by Mizuho also takes into account the latest Payment for Order Flow (PFOF) report and the observed strength in cryptocurrency trading. These factors have contributed to the firm’s decision to raise the price target for Robinhood stock, signaling a positive outlook for the company’s financial performance and potential growth areas. The company’s market capitalization now stands at $49.38 billion, reflecting investors’ confidence in its growth trajectory.
In other recent news, Robinhood Markets Inc. and Robinhood Derivatives, LLC (RHD) have experienced significant developments regarding their Super Bowl event contracts. Following the launch of these contracts, the Commodities and Futures Trading Commission (CFTC) requested a halt to the service. The suspension was announced by Robinhood shortly after the product’s introduction, which allowed customers to place wagers on the Super Bowl game outcome.
RHD, expressing disappointment over the development, had been in regular dialogue with the CFTC regarding its plans to offer this product. The company had initially rolled out the betting feature to approximately 1% of its customers. In spite of the setback, RHD plans to continue its collaboration with the CFTC as it works towards launching a more comprehensive event contracts platform later this year.
The suspension coincided with the CFTC’s investigation into Crypto.com and Kalshi regarding their offerings of Super Bowl event contracts. The outcome of the CFTC’s investigation could have implications for the availability and regulation of similar derivative products in the future. Robinhood had partnered with Kalshi for the Super Bowl bets, framing this feature as "event trading" rather than betting or gambling.
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