Analysts at Wall Street brokerage Bernstein see 78% upside in the stock of Robinhood Markets (NASDAQ: $HOOD) as the company expands into prediction markets and other new areas.
Bernstein reiterated a buy-equivalent outperform rating on HOOD stock with a $160 U.S. price target, which is nearly 80% higher than where the shares currently trade.
In a note to clients, the brokerage argues that the company’s crypto business is evolving from trading toward tokenization.
Bernstein is also bullish on Robinhood’s efforts to diversify its business, notably into prediction markets that gave the online brokerage’s second-quarter financial results a boost.
Gautam Chhugani, Bernstein’s lead crypto analyst, said Robinhood Chain, tokenized stocks, and Bitstamp represent strong growth drivers for Robinhood and diversify its business beyond stock and crypto trading.
Chhugani noted that Robinhood Chain has generated more than $12 billion U.S. in decentralized exchange volume and surpassed 150 million transactions since its launch.
Additionally, Stock Tokens from Robinhood are now available in more than 120 countries through Robinhood Wallet.
However, the Bernstein analyst is most bullish on Robinhood’s prediction market that launched in June of this year before the World Cup soccer tournament.
The prediction market has processed more than 3.5 billion contracts to date. Less than two months since launching and Robinhood’s prediction market is now the third largest in the U.S.
Prediction market revenue at Robinhood in the second quarter reached $156 million U.S., overtaking crypto trading’s $100 million U.S., notes Chhugani.
Bernstein’s bullish outlook for Robinhood comes after the company posted second-quarter financial results that topped Wall Street forecasts on the top and bottom lines.
HOOD stock is currently trading at $86.60 U.S. per share, having fallen 25% this year.
