Shares of Robinhood Markets Inc. (NASDAQ:HOOD) are trading higher Tuesday morning after Morgan Stanley analyst Mike Cyprys upgraded the company from Equal-Weight to Overweight and raised the price target from $124 to $150.
- Robinhood Markets stock is holding steady today. Where is HOOD stock headed?
Morgan Stanley Upgrades HOOD to Overweight With $150 Price Target
Cyprys noted that expanding product capabilities are improving the underlying economics of Robinhood’s installed 28-million customer base by driving higher assets, activity, and captured revenue per user rather than relying purely on new account growth or retail trading volume cycles.
On the revenue side, Morgan Stanley forecasts a 23% compound annual growth rate through 2028 to reach $8.0 billion, underpinned by broader wealth management offerings, active trader market share gains, prediction market engagement, and international or Rothera expansion.
From an operational standpoint, Cyprys projects expense growth to remain disciplined at a 14% CAGR through 2028, driving EBITDA margins from 48.0% in 2026 to 53% in 2028 with ~70% incremental margins, which supports a 28% EPS CAGR from $1.99 in 2026 to $3.28 in 2028.
Valuation-wise, the $150 target price applies a 25x multiple to a 2031 probability-weighted EPS estimate of $7.99, combining $5.06 from the core business and $2.93 from new initiatives, discounted back to present value, representing a 19% discount to Interactive Brokers’ projected 2027 P/E multiple of 30.8x.
Q2 Earnings Momentum and Execution
The sell-side upgrade builds on strong operational momentum reported during Robinhood’s second-quarter 2026 financial results, which were delivered on July 29. Total net revenues surged 32% year-over-year to $1.31 billion, driven by strength in options, equities, and high-margin subscription models like Robinhood Gold.
During the recent earnings call, Chairman and Chief Executive Officer Vlad Tenev highlighted the platform’s expanding ecosystem:
“Our Q2 results reflect the accelerating operating leverage across our business as we continue to broaden our product offerings. From active trading and prediction markets to long-term wealth management, we are successfully capturing a larger share of our customers’ overall financial lives while scaling our high-margin revenue streams.”
HOOD Stock Edges Higher Tuesday
HOOD Price Action: Robinhood Markets shares were up 1.14% at $106.02 at the time of publication on Tuesday, according to Benzinga Pro data.
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