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On Thursday, Needham analysts adjusted their outlook on Robinhood Markets (NASDAQ:HOOD), reducing the price target to $58 from the previous $62 while sustaining a Buy rating on the stock. Currently trading at $49.11, Robinhood appears overvalued according to InvestingPro analysis. The revision follows Robinhood’s latest earnings report, which revealed a slight outperformance in revenue, with impressive year-over-year growth of 58.23%, but a miss on adjusted EBITDA. The company experienced a dip in cryptocurrency trading volumes during the first quarter of 2025, although trading in options and equities continued to show strength.
The analysts highlighted that the volumes in the prediction market were consistent with their forecasts. They also pointed out the success of Robinhood’s futures market and the Gold card offering, noting a significant increase in Gold card users to 200,000, doubling from the prior count of 100,000. With a market capitalization of $43.34 billion and strong YTD returns of 31.8%, the company has shown remarkable momentum. The analysts anticipate further growth in the equities and options segments for the second quarter of 2025. However, they have factored in an approximate 48% decline in cryptocurrency trading, aligning with broader industry trends. Get deeper insights into Robinhood’s performance metrics and growth potential with InvestingPro’s comprehensive research report.
The report also mentioned an expected decrease in interest income due to anticipated lower rates. Nevertheless, this is believed to be partially mitigated by an increase in transactional activity that typically accompanies such an economic setting. Trading at a P/E ratio of 29.86 and maintaining a healthy financial score of 2.82 (rated as GOOD by InvestingPro), Robinhood shows strong fundamentals. The new price target of $58 falls within the broader analyst range of $36-$105, based on a 20 times multiple of the firm’s discounted 2026 enterprise value to EBITDA estimates.
Needham’s stance on Robinhood remains positive, as reflected in the maintained Buy rating, despite the lowered price target. The analysts’ commentary underscores the company’s mixed financial performance, with certain areas showing robust activity and others aligning with wider market challenges. The growth in newer offerings like the futures market and the Gold card is seen as a positive development for Robinhood’s diversification and user engagement.
In other recent news, Robinhood Markets reported its first-quarter 2025 earnings, revealing a mixed performance. The company’s earnings per share (EPS) exceeded expectations at $0.37, compared to a forecast of $0.36, marking a 111% increase year-over-year. However, revenue slightly missed projections, coming in at $927 million against an expected $929.83 million, although this still represented a 50% increase from the previous year. JMP Securities maintained a Market Outperform rating for Robinhood, with a $70 price target, citing the company’s robust growth trajectory. The firm also noted Robinhood’s adjusted EBITDA of $470 million, which was around 8% below estimates due to transaction costs related to the TradePMR deal. Additionally, Robinhood repurchased $322 million of its stock and expanded its buyback program to $1.5 billion. The company saw significant customer engagement, with record net deposits of $18 billion and a notable increase in funded accounts. Robinhood’s expansion into futures trading and international markets continues, alongside strategic acquisitions and new product launches, which are expected to bolster future growth.
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