Founded in 2013, Robinhood Markets (Nasdaq: HOOD) is a Menlo Park, California-based e-trading exchange that is best-known for its stock, cryptocurrency, and tokenized stock offerings. The bro
Founded in 2013, Robinhood Markets (Nasdaq: HOOD) is a Menlo Park, California-based e-trading exchange that is best-known for its stock, cryptocurrency, and tokenized stock offerings.
The brokerage platform has become very popular among retail traders due to its commission-free offerings across stocks and digital assets.
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BTIG is a global financial services firm specializing in investment banking, institutional trading, research, and related brokerage services.
On June 26, the firm's analyst Andrew Harte initiated coverage of Robinhood with a Buy rating and a price target of $125 for the stock, Investing.com reported.
As per Harte, Robinhood is "born to disrupt, built to compound" which has surpassed its commission-free trading fundamentals to bring a basket of cryptocurrencies, prediction markets, and wealth management.
An average Robinhood customer is 36 years old with an account balance of $13,000, while an average customer on a legacy exchange is heading toward retirement with an approximate balance of $200,000, the analyst highlighted. That is why Robinhood is "structurally advantaged to grow faster than legacy competitors," he argued.
Robinhood's priority is customer retention instead of letting them transition to legacy exchanges, Harte added.
The analyst acknowledged that the brokerage platform trades at 46x next twelve months' GAAP earnings per share (EPS) versus incumbent players at around 15x but said the premium is justified by its growth algorithm and "laundry list of nascent growth drivers," such as Trump Accounts, growing global footprint, and pattern day trading restriction elimination.
As per Harte, Robinhood is expected to compound assets at more than 20% annually over the next decade through demographic tailwinds, product expansion, and global growth.
Since the HOOD stock closed at $96.51 on July 26, Harte's price target of $125 represents an upside of approximately 30%.
At press time, the stock was trading at $96.70.
