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Robinhood’s strong 2024 performance could extend into the new year, according to Barclays. Analyst Benjamin Budish upgraded the online brokerage to overweight from equal weight. He also raised his price target of $49 from $26, implying that shares could rise nearly 18% from Friday’s close. HOOD YTD mountain HOOD YTD chart Shares of Robinhood have soared 227% this year in part thanks to strong gains in bitcoin, as traders use the platform to trade the digital currency. Bitcoin is up 131% in 2024 and topped $100,000 for the first time last week. Robinhood has also benefited from strong stock market gains, leading to greater retail trading activity. The S & P 500 scaled to record highs last week and is up 27.7% for the year. That would be the benchmark’s strongest annual performance since 2019, when it jumped 28.9%. “While we do expect a market downturn would negatively impact engagement on Robinhood, the trend in retail trading is now clearer to us as a longer-enduring trend,” Budish said. “Further, through incentives, product innovation, and marketing, Robinhood’s brand image has been meaningfully improved.” Budish also acknowledged that Robinhood has done better than he expected in terms of establishing a product roadmap with a long path of additions and geographic expansions. “Over the past few years, the revenue growth algorithm has been largely driven by asset growth: the company had generated annualized net deposits in excess of 20% (higher in FY24), with revenues generated around an annualized ~2% rate. While it is not quite clear if this correlation will exist in the future, there are plenty of sources of additional revenues to the current model,” he wrote. These additional revenue sources include the futures market, which Robinhood predicts could grow to a nine-figure business; crypto, which could see more favorable regulation under President-elect Donald Trump; and the company’s new Robinhood Gold credit card. Analyst sentiment on the stock is generally bullish. LSEG data shows 11 of 17 analysts covering Robinhood have a buy or strong buy rating, while another five rate it as a hold. Just one analyst has an underperform rating on the brokerage.
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