Compass Point Still Bullish on Robinhood, Citing Prediction Market Growth

Analysts at Compass Point are optimistic about Robinhood, highlighting significant growth in its prediction markets. They expect revenue from these markets to outpace revenue from transaction processing when the company's third-quarter earnings are reported. It is projected that prediction market revenue grew 100% quarter-over-quarter to $20 million, while transaction revenue is expected to increase by 35%. The autumn sports season is anticipated to boost betting activity, particularly with Robinhood's NFL and college football betting options introduced in August. The analysts predict that Robinhood will generate $50 million in revenue in the fourth quarter, coinciding with a full NFL season. Additionally, despite being commission-free for stock and crypto trades, Robinhood will implement a fee for trades involving event contracts. As Robinhood continues to engage with prediction markets and explore opportunities in the UK, its stock is forecasted to rise, supported by these developments and a target price now set at $161, an increase from $105.

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