tl;dr
Robinhood's stock is climbing as prediction markets and sports betting drive revenue growth, with analysts upgrading its rating to 'buy' and forecasting a new all-time high. The brokerage's strategic partnerships, regulatory shifts, and expansion into international markets position it as a key playe...
**Robinhood’s Stock Eyes New Highs as Prediction Markets and Sports Betting Fuel Growth**
Robinhood, the popular retail brokerage, is positioning itself as a key player in the booming prediction market space, with analysts at Compass Point forecasting a significant rise in its stock price. The investment bank recently upgraded its rating on Robinhood (HOOD) to “buy,” lifting its price target to $161—a new all-time high—citing strong growth in prediction markets, crypto trading fees, and staking rewards.
### Prediction Markets Drive Revenue Surge
Compass Point analysts highlighted that Robinhood’s prediction market revenue is outpacing traditional transaction income. For the third quarter, prediction market revenue is expected to surge 100% quarter-over-quarter to $20 million, while transaction revenue is projected to grow 35% during the same period. This shift underscores the growing appeal of prediction markets, which allow users to bet on events ranging from sports outcomes to economic indicators.
The timing aligns with the U.S. autumn sports season, a period when bettors traditionally engage more with sports betting. Robinhood’s partnership with prediction market platform Kalshi has enabled users to wager on NFL and college football games, a move that coincides with the start of the NFL season. Analysts noted that the firm could generate $50 million in fourth-quarter revenue “alongside a full quarter of NFL season,” emphasizing the seasonal tailwind.
### Sports Betting and Regulatory Shifts
Professional sports have become a critical growth driver for Robinhood. The company’s prediction markets mirror the functionality of traditional sportsbooks, offering users a streamlined way to engage with sports betting. While Robinhood does not charge commissions on stock or crypto trades, it levies a one-cent fee on event contracts, a model that aligns with its broader strategy of monetizing niche financial products.
The regulatory landscape has also shifted in favor of prediction markets. Following Kalshi’s legal victory against the Commodity Futures Trading Commission (CFTC), which had long sought to block its presidential election contracts, the market gained legitimacy. This breakthrough, coupled with the success of platforms like Polymarket, has solidified prediction markets as a viable alternative to traditional polling.
### Expansion and Competition
Robinhood is not resting on its laurels. The company is in talks with UK regulators to expand its prediction markets to new international markets, signaling ambitions beyond the U.S. Meanwhile, competitors are entering the space: DraftKings recently acquired prediction market exchange Railbird, signaling a broader convergence between sports betting and financial services.
### Stock Performance and Outlook
Robinhood’s stock has already responded positively to these developments. On Monday, shares rose over 5% to nearly $146, reflecting investor optimism. Analysts expect the company to report third-quarter earnings on November 5, with earnings per share of $0.54 on $1.2 billion in revenue. If Compass Point’s $161 price target is achieved, it would surpass the previous all-time high of $153 set earlier this month.
As Robinhood continues to capitalize on the intersection of finance, sports, and technology, its success in prediction markets could redefine how retail investors engage with both traditional and alternative financial products. With regulatory hurdles easing and consumer demand growing, the brokerage’s trajectory appears poised for continued momentum.