Morgan Stanley upgrades Robinhood and lifts price target to $150

Morgan Stanley upgrades Robinhood and lifts price target to $150

Analyst Michael Cyprys said the market sees Robinhood's product growth but may be missing how it is boosting existing customer economics.

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By Editorial Team
Edited by Vivian Nguyen

Morgan Stanley upgraded Robinhood to overweight, betting its growing product lineup can drive more revenue from its existing users, and raised the price target to $150 from $124.

The new target represents roughly 43% upside from Monday’s close. Shares of Robinhood advanced 2% ahead of today’s market opening.

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Morgan Stanley analyst Michael Cyprys said Robinhood’s expanding platform is translating product growth into stronger customer economics, including higher assets, activity and monetization per user.

Cyprys said the market is increasingly recognizing Robinhood’s product velocity and expanding total addressable market, but has not fully appreciated the effect those products could have on the company’s existing customer base. Robinhood has roughly 28 million users, providing a large audience for new products without requiring the company to build an entirely new customer base.

Prediction markets offer an early example of that strategy. Cyprys said fewer than 2 million prediction-market users generated $156 million in second-quarter revenue and also adopted other Robinhood products.

Robinhood’s Rothera derivatives exchange and clearinghouse could extend the company’s distribution advantage into the financial market infrastructure. Cyprys said the business could add exchange economics to Robinhood’s own trading flow while potentially generating revenue from third-party activity.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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Morgan Stanley upgrades Robinhood and lifts price target to $150
Morgan Stanley upgrades Robinhood and lifts price target to $150

Analyst Michael Cyprys said the market sees Robinhood's product growth but may be missing how it is boosting existing customer economics.

By Editorial Team
Edited by Vivian Nguyen

Share

Add us on Google

Morgan Stanley upgraded Robinhood to overweight, betting its growing product lineup can drive more revenue from its existing users, and raised the price target to $150 from $124.

The new target represents roughly 43% upside from Monday’s close. Shares of Robinhood advanced 2% ahead of today’s market opening.

Advertisement

Morgan Stanley analyst Michael Cyprys said Robinhood’s expanding platform is translating product growth into stronger customer economics, including higher assets, activity and monetization per user.

Cyprys said the market is increasingly recognizing Robinhood’s product velocity and expanding total addressable market, but has not fully appreciated the effect those products could have on the company’s existing customer base. Robinhood has roughly 28 million users, providing a large audience for new products without requiring the company to build an entirely new customer base.

Prediction markets offer an early example of that strategy. Cyprys said fewer than 2 million prediction-market users generated $156 million in second-quarter revenue and also adopted other Robinhood products.

Robinhood’s Rothera derivatives exchange and clearinghouse could extend the company’s distribution advantage into the financial market infrastructure. Cyprys said the business could add exchange economics to Robinhood’s own trading flow while potentially generating revenue from third-party activity.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.