Robinhood stock spiked 5% on Monday after Compass Point analysts raised their price target to $161 from $105.
The analysts pointed to three key drivers: rising fees from crypto trading, strong equity volume, and a new source of money most people didn’t see coming; prediction markets.
Yeah, Robinhood users are now betting on stuff like football games, shutdown deadlines, and where Bitcoin’s headed. And that’s actually making the company a lot of money.
Compass Point’s Ed Engel said in a client note that they expect Robinhood “to disclose October trends pacing well above 4Q expectations.” He and his team kept their Buy rating unchanged.
They’re betting big that Robinhood’s performance this quarter is going to beat what Wall Street expects, especially in places no one was watching six months ago.
Prediction markets bring surprise revenue
According to Engel, Robinhood’s prediction market feature (launched earlier this year) is exploding. “We forecast HOOD generating ~$20m in revenue from prediction markets in 3Q, which is up over 100% QoQ,” he wrote.
These “event contracts” let users bet on just about anything: sports, politics, or market events. Robinhood charges $0.01 per contract, and it’s raking in volume.
Robinhood CEO Vlad Tenev posted last month on X that over 4 billion contracts have been placed on the platform so far, and more than 2 billion of them were just in Q3.
That means Robinhood may have already made around $40 million just from this feature. Engel believes Q4 will go even harder because the NFL season is fully underway. “We model HOOD’s 4Q prediction reaching ~$50m alongside a full quarter of NFL season,” he added.
And this isn’t slowing down. Engel says the market is undervaluing Robinhood’s crypto segment, too. Specifically, he sees staking revenue and fee increases playing a bigger role in the coming quarters.
“We don’t believe the Street is accurately forecasting HOOD’s 2H25 or 2026 crypto revenue, which includes higher fee rates and staking revenue,” he warned.
Crypto fees and trading volumes keep rising
Robinhood’s crypto business is showing new life. Staking (where users lock in their tokens in exchange for a reward) is acting like a yield engine.
Add that to increased trading activity and higher fee rates, and you’ve got a formula for long-term gains, whether Wall Street’s paying attention or not.
Robinhood reports earnings next Wednesday after market close. Right now, 20 analysts rate the stock a Buy, 8 say Hold, and only 1 thinks it’s a Sell.
Notably, Robinhood is up over 250% year to date, and last month, it was added to the S&P 500. That’s a big credibility move in the eyes of institutional investors.
The broader market was also on fire Monday. The S&P 500 gained 1.1%, the Nasdaq rose 1.7%, and the Dow added 244 points.
That’s partly because U.S. and China cooled off trade tensions over the weekend. Both Trump and Xi are now on track to announce a deal this week.
Nvidia, Broadcom, and other chipmakers were leading the rally, each up more than 2%. Tesla added 5%, while Apple inched closer to a $4 trillion market cap. Qualcomm went up over 12% after showing off its new AI chips, and tech earnings are coming fast.
Alphabet, Amazon, Apple, Meta, and Microsoft are all reporting this week. And traders are watching the Federal Reserve, which is expected to cut interest rates on Wednesday after inflation data came in cooler than expected last week.
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