StoneX Financial, the brokerage and equity research arm of StoneX Group, has given Robinhood a Buy rating and a $170 price target, citing its new Layer 2 chain and prediction markets business as key growth drivers.
In a Tuesday research note initiating coverage of Robinhood, Mark Palmer, managing director and senior research analyst at StoneX, wrote that nearly every operating metric at the company is "accelerating."
Robinhood shares (HOOD) closed down 3.91% at $117.34 on Tuesday. StoneX's price target implies about 45% upside from the current price level.
Robinhood's second-quarter revenue grew 32% year-on-year to $1.31 billion while cryptocurrency revenue fell 38%, "leaving crypto at 8% of net revenues against 16% a year earlier," Palmer said.
Palmer highlighted Robinhood's expansion beyond retail trading services. "The company has been buying its way into exchange and blockchain infrastructure at software margins," he wrote. The company's Robinhood Chain, which went live on mainnet on July 1, has collected more gas fees over a trailing 24-hour period than any other Ethereum Layer, according to the report.
