Robinhood Markets shares climbed 2.7% in Monday morning trading, outpacing a market that was slightly lower and a group of crypto-linked stocks that tumbled more than 2%. The move followed an upgrade from Wolfe Research.
Wolfe analyst Steven Chubak moved Robinhood from Peerperform to Outperform and established a price target of $125.00, a level that implies substantial upside relative to Friday’s close of $82.80. Chubak said the upgrade reflects an effort to "take advantage of the recent selloff and deterioration in sentiment surrounding the broader crypto ecosystem."
Chubak observed that Robinhood's share price has largely returned to the same level at which he downgraded the stock a year ago. He contrasted that valuation trajectory with what he describes as improved earnings potential generated by newer initiatives such as Prediction Markets, a wider international presence, and a deeper product suite.
The analyst also pointed to company-specific estimate revisions that have outpaced those of peers, implying that consensus expectations may underappreciate certain growth drivers. At the same time, Wolfe Research expects declining crypto volumes to weigh on fourth-quarter results.
Despite that anticipated headwind, Chubak still sees upside to consensus due to possible positive surprises from prediction markets and stronger retail engagement across options, equities, and margin products. Looking further ahead, Wolfe Research anticipates continued growth in prediction markets but cautions that this segment could confront state-imposed restrictions and downward fee pressure from competitors over the long term.
The upgrade arrives while many names tied to the cryptocurrency ecosystem face selling pressure, a backdrop that makes Robinhood’s relative outperformance in Monday trading noteworthy.
Key context and implications
- Analyst action: Wolfe Research upgraded Robinhood to Outperform and set a $125 price target, up from the prior Peerperform rating.
- Near-term dynamics: Declining crypto volumes are expected to be a headwind for Q4 earnings, though other product lines may offset some of that impact.
- Longer-term considerations: Prediction markets are viewed as a growth engine but may face regulatory constraints and competitive fee pressure.
Summary
Wolfe Research’s upgrade and $125 target reflect an analyst view that current sentiment and recent share weakness create an attractive entry point given Robinhood’s broadened revenue mix. The firm acknowledges short-term crypto-related pressures but highlights upside potential from prediction markets and increased retail engagement across other product verticals.