Robinhood Markets (HOOD) has been on a remarkable run, delivering a staggering return of 258% over the past three years. One of the major reasons behind this success story is its remarkable financial turnaround. Robinhood has flipped from losses to profitability, with revenue surging through consistent year-over-year gains. This impressive comeback has boosted investor confidence, making the stock a standout in the fintech space.
What once started as a simple trading app has rapidly evolved into a fintech powerhouse with diverse revenue streams from trading fees, interest income, and subscriptions. In fact, over the years, the company has expanded its product suite with retirement investing, crypto wallets, and its gold credit card, driving stronger user retention and adding more muscle to its fundamentals. And now, Robinhood is turning heads once again with a game-changing announcement this month.
On March 17, the company revealed its Prediction Markets Hub, a new feature integrated directly into its app. This platform lets users trade on the outcomes of major global events. At launch, customers can bet on the upper bound of the target federal funds rate for May or wager on the winners of the March Madness college basketball tournament. Thus, with Robinhood pushing into a lucrative new frontier, investors may want to keep this fintech stock firmly on their radar.
About Robinhood Stock
California-based Robinhood Markets (HOOD) has reshaped financial services with its commission-free trading model, making investing accessible to millions. The company’s platform offers a diverse range of products, including stocks, options, futures, crypto, and retirement accounts, along with premium perks through Robinhood Gold. With its ever-expanding suite of financial tools, Robinhood continues to cater to a new wave of modern investors.
And the company’s momentum is hard to ignore. Valued at roughly $39 billion, shares of this financial company have rallied almost 162% over the past year, massively outshining the S&P 500 Index’s ($SPX) 10% return during the same stretch. Plus, even as the broader market struggles this year, Robinhood continues to defy the downturn. While the SPX has lost 2% so far in 2025, HOOD stock is up 29% YTD.
Robinhood’s soaring price action is reflected in its premium valuation. The stock currently trades 29.3 times forward earnings and 13.1 times sales, significantly higher than its sector averages of 10.62x and 2.98x, respectively, highlighting investors’ optimism over its growth trajectory.
Robinhood Tops Q4 Estimates
Following the company’s blowout fourth-quarter earnings results published on Feb. 12, which crushed Wall Street’s top- and bottom-line predictions, shares of Robinhood closed up more than 14% in the next trading session. The financial services platform posted a record total net revenue of $1 billion, marking a staggering 115% year-over-year jump, handily beating the analyst estimates of $951.8 million. Even more impressive, Robinhood’s earnings came in at $1.01 per share, a massive leap from just $0.03 per share in the prior-year quarter, crushing Wall Street estimates by a stunning 126.5%.
The company’s remarkable financial success in the final quarter of 2024 can be largely attributed to a substantial increase in transaction-based revenues, which grew over 200% annually to $672 million. A major contributor to this growth was cryptocurrency, where revenue exploded by more than 700% to $358 million, highlighting the platform’s growing foothold in the digital asset space. The company’s key metrics also showcased remarkable improvements.
For instance, assets under custody (AUC) soared 88% year-over-year to $193 billion, while net deposits hit a record $16.1 billion for the quarter. Meanwhile, Robinhood’s premium Gold subscription service saw its user base swell by 86% annually to 2.6 million, underscoring its strengthening customer retention and expanding revenue streams. Commenting on the strong financial performance, CFO Jason Warnick called Q4 a “record-breaking quarter that capped off a record-setting year in 2024.”
With this strong momentum, Warnick expressed confidence that Robinhood is well-positioned to deliver another year of profitable growth in 2025. In fiscal 2025, Robinhood plans to ramp up growth investments focusing on new products, features, and international expansion while driving greater efficiency across its existing businesses. The company expects its combined adjusted operating expenses and stock-based compensation (SBC) for the full year to range between $2.0 billion and $2.1 billion.
Robinhood Rallies on New Prediction Markets Hub
Robinhood is shaking up the financial world once again with its bold entry into prediction markets, a move that sent its stock jumping over 7% on March 17. Through its subsidiary Robinhood Derivatives, the company unveiled a Prediction Markets Hub directly within its app, giving users the chance to trade contracts on the outcomes of major global events.
The event contracts will initially be available across the U.S. through KalshiEX, a CFTC-regulated exchange, with a full rollout to all eligible customers in the coming days. “We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports, and culture,” said JB Mackenzie, VP & GM of Futures and International at Robinhood.
Unlike traditional stock or bond investments, prediction market traders speculate on specific future event outcomes. In fact, prediction markets have been gaining momentum, especially after President Donald Trump’s victory in the U.S. presidential election. According to Fortune, prediction platforms like Polymarket and Kalshi drew billions of dollars in bets and accurately forecast Trump’s win. And with an estimated $3.1 billion set to be legally bet on this month’s March Madness men’s and women’s college basketball tournaments, Robinhood is making a perfectly timed entrance in this lucrative space.
What Do Analysts Expect for Robinhood Stock?
Leading investment bank Morgan Stanley is bullish on Robinhood following the launch of its Prediction Markets Hub, calling it a “milestone event” with significant upside potential. Analyst Michael Cyprys believes the new platform, which lets users trade on event outcomes, isn’t yet factored into estimates but could drive upward EPS revisions. If Robinhood replicates its earlier success with election contracts on a broader scale, the investment firm estimates the hub could add $260 million in revenue, boosting EPS by $0.20, or 14%. Thus, Morgan Stanley maintains an “Overweight” rating on the stock with a $90 price target.
Overall, Wall Street remains optimistic about HOOD stock, with a consensus “Moderate Buy” rating. Of the 21 analysts offering recommendations, 13 back it with “Strong Buy,” two give a “Moderate Buy,” and the remaining six maintain “Hold.” The average analyst price target of $65.58 indicates 35% potential upside from the current price levels, while the Street-high price target of $105 suggests that HOOD could rally as much as 116% from here.
