Overview
- Citing strong Q2 results, Morgan Stanley raised Robinhood’s rating to Overweight and set a $150 price target on Sept. 1 because it expects the company to extract more revenue from its existing customer base.
- Robinhood reported a 24% year‑over‑year rise in average revenue per user to $187 and roughly 28.4 million funded accounts, evidence that product cross‑selling is increasing customer economics.
- Prediction markets exploded, producing $156 million in Q2 revenue from fewer than 2 million users and more than 13 billion contracts, and Rothera has processed billions of those trades so Robinhood can keep more of the fees.
- Morgan Stanley raised its 2026–2028 EPS forecasts by about 12%–15% and now models roughly 23% revenue CAGR to $8 billion by 2028, while cutting crypto assumptions because other businesses are growing faster.
- Regulatory risk remains: a recent Ninth Circuit decision allows Nevada to apply gaming laws to some event contracts, Robinhood has said it will appeal, and the company’s fastest‑growing product faces unresolved state and federal legal questions.