Robinhood Stock Undervalued As Cryptocurrency Play, Analyst Says: 'Crypto Market Cap To Reach $7.5 Trillion Vs. $2.6 Trillion Today'
Portfolio Pulse from Chris Katje
Robinhood Markets (NASDAQ:HOOD) shares rose after data showed increased February trading and account activity. Analysts view Robinhood as an undervalued cryptocurrency play, with Bernstein initiating an Outperform rating and a $30 price target, and Goldman Sachs reiterating a Neutral rating with a $13 price target. Bernstein expects the crypto market cap to reach $7.5 trillion, significantly benefiting Robinhood's cryptocurrency-related revenue. Robinhood's comprehensive crypto offerings and its large base of active traders position it well in the market, especially as traditional brokers remain hesitant to offer cryptocurrency trading.
March 14, 2024 | 6:27 pm
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NEUTRAL IMPACT
Coinbase Global is mentioned as a comparison to Robinhood, with current trading at 14.2x 2024 revenue and 13.4x 2025 revenue estimates. This comparison is used to justify Robinhood's $30 price target.
While Coinbase is used as a benchmark to justify Robinhood's price target, the direct impact on Coinbase's stock is neutral in the short term. The comparison serves more to highlight Robinhood's potential rather than predict movement in Coinbase's stock.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Robinhood is seen as undervalued in the cryptocurrency space, with potential for significant revenue growth as the crypto market expands. Bernstein rates it Outperform with a $30 target, while Goldman Sachs has a Neutral stance with a $13 target.
The positive outlook from Bernstein, expecting a 9-fold increase in cryptocurrency-related revenue and setting a high price target, suggests a bullish short-term impact. Goldman Sachs' neutral stance and lower price target provide a counterbalance, but the overall analyst sentiment and market trends indicate potential upside.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100