Morgan Stanley believes that Robinhood's ability to monetize its existing user base is not fully appreciated by the market, creating opportunities for investors:
The investment bank upgraded the trading platform from equal weight to overweight:
They also raised the price target on shares from $150 to $124, implying a 43% upside:
“Robinhood’s expanding platform is turning product velocity into stronger customer economics: more assets, activity, and monetization per customer, supporting a longer growth runway than appreciated,” analyst Michael Cyprys said:
He noted that Robinhood’s foray into several types of new trading products should allow it to leverage its existing base of roughly 28 million users to bring in more revenue:
“Prediction markets provide a proof point for Robinhood’s distribution, with less than 2 million users generating $156 million of second-quarter revenue,” he added:
Morgan Stanley’s call aligns with consensus on Wall Street, where 22 of the 28 analysts covering Robinhood have a buy or strong buy rating on the stock.
