Robinhood Markets (NASDAQ:HOOD) shares rose more than 4% pre-market today after Piper Sandler analysts raised their price target for the company to $27 from $23, while maintaining an Overweight rating on the stock.
The analysts highlighted that cryptocurrency accounted for approximately 16% of Robinhood’s net revenues in the first half of 2024. Although Robinhood offers the most comprehensive crypto platform among traditional U.S. retail brokers, its offerings remain more conservative compared to crypto-native firms like Coinbase. The analysts believe that the potential passage of comprehensive crypto legislation in the U.S. could present a significant growth opportunity for Robinhood. The company is well-positioned to capitalize on this shift due to its conservative crypto approach, which could be expanded, and its younger customer base, which is likely to embrace new crypto products.
The analysts estimate that an expanded crypto offering could boost Robinhood’s earnings by 10%-12%, supporting the higher price target.