Morgan Stanley upgrades Robinhood, sees 43% upside

Investing.com -- Robinhood Markets (NASDAQ: HOOD) shares are up 2.4% in premarket trading after Morgan Stanley upgraded the stock to Overweight from Equal-weight and raised its price target for the stock to $150 from $124, implying 43% upside.

The bank said Robinhood's expanding platform is turning product velocity into stronger customer economics, with more assets, activity and monetization per customer supporting a longer growth runway than appreciated.

Analyst Michael Cyprys raised his 2026 to 2028 earnings estimates by 12% to 15%.

"We see increasing evidence that broader product capabilities are improving the economics of HOOD's installed customer base," Cyprys wrote, pointing to assets per customer up 23% year over year and Gold users holding around 4.2 times the average customer's assets under custody.

Rather than relying on funded-account growth, the bank said Robinhood increasingly has multiple ways to grow revenue from its 28 million existing customers, with 13 business lines now generating more than $100 million in annualized revenue.

It cited prediction markets as a proof point, with fewer than 2 million users generating $156 million of second-quarter revenue.

Morgan Stanley expects a 23% revenue CAGR through 2028 to $8.0 billion, around 6% above consensus, with expense discipline lifting EBITDA margins to 53% from 48%.

The bank flagged the Sept. 29-30 HOOD Summit, along with Rothera, perpetual futures and agentic trading, as key catalysts. Its target applies a 25 times multiple to 2031 probability-weighted earnings.

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