By Robinhood Markets Inc (NASDAQ: HOOD) has already doubled over the past four months but the coming year will still likely be a strong one for this financial technology company, as per a Morgan Stanley analyst.
Michael Cyprys upgraded HOOD this morning to “overweight” and said it will prove to be one of the biggest beneficiary of the Trump presidency.
He raised his price target on Robinhood stock as well to $54 that indicates potential for another 50% gain from here.
What could drive Robinhood stock up in 2025?
Morgan Stanley expects potential deregulation under Donald Trump as the President of the United States will enable Robinhood to participate more aggressively in the crypto market.
Its analyst is bullish on the financial services firm as it stands to benefit from a possible recovery in merger and acquisitions. An expected uptick in initial public offerings (IPOs) may also mean a more favourable retail trading environment for HOOD in 2025.
“Revenue growth looks stronger post the election, boosted by more sustained retail trading as support for crypto broadens, M&A opens up, and animal spirits revive,” Michael Cyprys told clients in a research note today.
Robinhood stock, however, remains unattractive for income investors as it doesn’t pay a dividend at writing.
HOOD is diversifying its sources of revenue
Robinhood recently announced plans of buying TradePMR for $300 million in cash-and-stock.
The acquisition will help expand its advisory business and add significant optionality to its online platform over the long term.
“HOOD is clearly executing on plans to broaden its offerings to capture more wallet share and expand its total addressable market,” the Morgan Stanley analyst added in his note on Monday.
Michael Cyprys sees significant upside in Robinhood stock as he’s convinced the fintech will grow its profit at a compound annualised rate of about 15% to hit $4.0 billion by the end of 2027.
Despite a massive year-to-date rally, HOOD shares are still trading at the same price it which they debuted on in 2021.
Robinhood turned a profit in its fiscal Q3
Other recent developments at Robinhood Markets include the launch of a desktop trading platform, a credit card, high-risk margin trading in the UK, and addition of futures and index options trading.
The financial services company fell short of Street estimates in its recently concluded quarter. Still, Morgan Stanley remains positive on this crypto stock as it, nonetheless, swung to a profit in Q3.
HOOD ended its third quarter with 11 million monthly active users and 2.2 million gold subscribers – up a whopping 65% versus last year. The company’s average revenue per user also went up another 31% to $105 in Q3.
Michael Cyprys expects next year to be a strong one for Robinhood stock also because its management has indicated plans of expanding offerings further in 2025.
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