Robinhood Positioned to Benefit from Potential Crypto Deregulation
One online brokerage name has emerged as Bernstein’s top pick to benefit from potential crypto deregulation, with analysts raising their price target for the stock to $51 from $30 in a note this week.
Unique Position for Growth
The firm highlights Robinhood’s (NASDAQ:) unique position to capitalize on a potentially pro-crypto SEC under a Trump administration, which could clear the path for significant revenue growth.
Current Market Performance
Despite its share price already surging 170% year-to-date, Bernstein sees further upside.
Regulatory Constraints
“HOOD has so far operated a regulatory-constrained crypto business,” the analysts noted, listing only 15 tokens compared to over 250 on Coinbase.
They note that the current SEC’s hawkish stance has limited Robinhood’s ability to monetize its crypto offerings through staking, lending, and other revenue-generating services.
Potential Regulatory Tailwinds
This could change as Bernstein anticipates regulatory tailwinds under a pro-crypto environment, enabling Robinhood to expand its token listings and introduce new crypto revenue streams.
Expansion and Revenue Growth
Recently, Robinhood added four tokens, including SOL, ADA, XRP, and PEPE, bringing its total to 19—a move viewed as a precursor to further expansion.
Bernstein estimates a 20% increase in Robinhood’s 2025 crypto revenue compared to prior forecasts, driven by market share gains and the rollout of new services.
Strategic Acquisitions
The company’s acquisition of Bitstamp and the launch of its EU crypto platform are also expected to accelerate its entry into staking, stablecoin access, and lending.
Financial Projections
The analysts project Robinhood’s 2025 revenues to reach $4.19 billion, with over $1.3 billion in earnings as the company leverages its predominantly fixed operating costs.
Bernstein values Robinhood at 10.8x its 2025 revenues and 33x its 2025 earnings, reflecting the average multiples for crypto and fintech peers.
Future Growth Potential
With crypto deregulation on the horizon, Bernstein concludes that they “expect HOOD to be the biggest beneficiary of crypto regulatory tailwinds,” offering a potential 46% upside from current levels.
Analysis of Robinhood’s Potential Growth
Robinhood, the online brokerage firm, is poised to benefit significantly from potential crypto deregulation, which could pave the way for substantial revenue growth. Despite its already impressive performance in the market, analysts see further upside for the company due to its unique position and strategic initiatives. Here’s a breakdown of why Robinhood’s potential growth is noteworthy:
Regulatory Constraints and Expansion Opportunities
- Robinhood has faced regulatory constraints in its crypto business, limiting its offerings compared to competitors like Coinbase.
- Anticipated regulatory tailwinds could enable Robinhood to expand its token listings and introduce new revenue streams, driving growth.
Financial Projections and Strategic Acquisitions
- Bernstein estimates a 20% increase in Robinhood’s 2025 crypto revenue, driven by market share gains and new services.
- The company’s acquisition of Bitstamp and EU crypto platform launch are expected to accelerate its entry into staking, stablecoin access, and lending.
Potential Upside and Market Value
- With a projected revenue of $4.19 billion by 2025, Robinhood is valued at 10.8x its revenues and 33x its earnings, in line with industry peers.
- Analysts see a 46% potential upside from current levels, making Robinhood a compelling investment opportunity.