Robinhood(HOOD.US)The bull market story is not over! The growth narrative of America's "internet celebrity broker" has gained recognition on Wall Street

The American “internet celebrity broker” Robinhood Markets, Inc. (HOOD.US), which has gone viral worldwide, has been included on the stock lists of several Wall Street institutions as a “must-buy and hold long-term” stock for the next three years. Despite senior analyst Craig Siegenthaler from the Wall Street financial giant Bank of America significantly lowering the target price from $147 to $122, he continues to maintain a “buy” rating on the stock. As of last Friday’s US stock market close, Robinhood’s stock price fell 4.53% to $75.85. BofA’s latest target price suggests a bullish stance even after the downgrade.

It is worth noting that Bank of America has recently been actively adjusting its earnings per share (EPS) expectations for brokerage firms, asset management companies, and international securities exchanges, all of which have recently reported their latest earnings and are within BofA’s analyst coverage. The main reason for the downgrade of Robinhood by BofA is the overall earnings outlook adjustment for brokerage and asset management companies. After reviewing the earnings forecasts of core brokerages including Robinhood, BofA believes that the future EPS trajectory should be slightly lower than previously thought, leading to a moderate reduction in the target price. However, they remain confident in the company’s long-term growth potential rather than dismissing its strong growth prospects.

BofA analysts believe that Robinhood’s fundamental growth drivers still exist (such as large platform assets, retail-driven trading revenue, and substantial net interest income growth), but recent macroeconomic conditions and earnings rhythm adjustments require a more cautious valuation outlook.

In its recent earnings announcement, Robinhood released its financial results for Q4 2025 and fiscal year 2025 on February 10. The financial report shows that the company’s quarterly total net revenue increased significantly by 27% year-over-year to $1.28 billion; trading-related revenue grew 15% YoY to $776 million, and net interest income increased 39% YoY to $411 million. The report also indicates that Robinhood’s total platform assets surged 68% YoY to $324 billion, mainly driven by continuous net deposits, acquisitions, and a substantial increase in stock asset valuations.

Robinhood Markets, Inc. operates a financial services platform primarily targeting retail investors worldwide. The platform allows users to invest in ETFs, options, cryptocurrencies, American Depositary Receipts (ADRs), stocks, and gold, among other assets. It also operates and owns an online digital currency trading platform.

In 2025, Robinhood’s stock price surged over 200%. Its main business includes online brokerage and electronic trading services, providing a trading platform for retail investors to trade stocks, options, ETFs, cryptocurrencies, index options, futures, and prediction markets. The company has also expanded into diverse product lines such as crypto wallets, wealth management, credit cards, and banking services. Founded on a “zero-commission trading” model, Robinhood quickly gained user base and market attention through its young customer demographic and gamified trading experience. The company’s core revenue sources include trading commissions, net interest income, cryptocurrency trading revenue, and subscription services.

The significant rise in Robinhood’s stock price in 2025 was driven by multiple growth factors. First, the company’s performance in fiscal year 2025 improved markedly, with sustained high revenue growth and profitability, supported by active trading, expanding platform assets, and increased user engagement, helping it shed its previous loss-making label. Its revenue structure performed strongly in core areas like stocks, options, and crypto trading, while new businesses—such as prediction markets similar to Polymarket and tokenized trading—also boosted market expectations. The over 200% stock price increase was further fueled by retail investor enthusiasm, sustained by the ongoing US stock bull market, as well as a recovery in the crypto market and overall bullish environment in US equities, leading to a broad increase in trading volume.

However, since 2026, Robinhood’s stock performance has experienced a significant decline, falling over 30% this year, mainly reflecting the market’s reassessment of its growth pace and profitability sustainability. On one hand, the latest financial reports show a sharp decline in crypto revenue, which was a key growth driver in 2025, leading to lowered expectations for future growth. On the other hand, although overall profitability remains solid, some analysts believe that the current valuation overestimates future growth prospects. Short-term headwinds include macroeconomic volatility caused by tariffs and geopolitical tensions, fluctuations in retail trading activity, and uncertainties around crypto trading revenue. Overall, the boom in 2025 and the correction in 2026 reflect a dynamic tug-of-war between investor sentiment and Robinhood’s fundamentals.

Wall Street’s Overall Consensus Bias Toward Bullishness

According to TIPRANKS, the broader Wall Street consensus leans optimistic. Of the 21 analysts covering Robinhood, 19 give a “buy” rating, 2 recommend “sell,” and 3 are on hold. Their target price range is mostly between $120 and $140. The average 12-month target price is approximately $130.10, with the highest at an astonishing $180 and the lowest around $100—meaning even the lowest target exceeds the current trading price.

This latest Wall Street consensus highlights that, despite some recent downgrades of Robinhood’s 12-month target price, most institutions remain optimistic about its medium- to long-term fundamentals, believing its revenue and operating profit growth momentum remains strong (e.g., Wall Street’s consensus forecast of an 85.3% increase in FY2025 adjusted EPS). Additionally, platform expansion into new areas like prediction markets and other features can help mitigate volatility in crypto trading.

For example, Wolfe Research recently upgraded Robinhood to “Outperform,” believing that the revenue growth trajectory of prediction markets can partly offset weakness in other areas, and that prediction markets as a new revenue source are sustainable. BofA analyst Craig Siegenthaler continues to emphasize confidence in the company’s long-term growth path, citing platform asset growth and business expansion as supportive factors, and expects continued increases in trading and net interest income. Another major Wall Street firm, Goldman Sachs, recently lowered its target price from $130 to $111 but maintained a “Buy” rating, indicating confidence in the company’s long-term growth but acknowledging that fair valuation should reflect more cautious profit forecasts.

Since late 2024, prediction markets have become globally popular, especially after the US presidential election. At that time, nearly everyone was betting real money on platforms like Polymarket on whether Trump or Harris would win, signaling the arrival of an era where “anything can be bet on.”

What Are Prediction Market Companies? They are platforms that create tradable binary contracts based on real-world events: contracts are usually settled as “yes/no” (e.g., whether an event occurs), and their prices can be interpreted as market-implied probabilities. In the US, these contracts are often packaged as regulated derivative “event contracts.”

Undoubtedly, the large investor base of Robinhood and similar platforms introducing related contract trading, along with traditional giants like ICE and CME entering through investments or new platforms, has significantly boosted the credibility and user reach of the entire prediction industry.

Prediction markets, especially in the form of “event contracts,” have entered sports betting in some states where legal sports betting is not available, attracting trading volume and becoming an important incremental source for platforms like Kalshi. This has also sparked regulatory debates at the state level. More significantly, some Wall Street investment firms and professional trading funds are using prediction markets to hedge or bet on macroeconomic or corporate event probabilities (such as Federal Reserve monetary policy or the success of major mergers), because the binary structure of these contracts offers a more “pure” expression of probabilities.

Analysts from Citizens Financial Group Inc., a well-known Wall Street financial institution, stated in a report that prediction market companies like Polymarket could see their overall revenue grow to five times the current market size by 2030, surpassing $10 billion in revenue.