Bernstein analysts suggest that a potential change in US leadership might create favorable conditions for cryptocurrency development, benefitting Robinhood's revenue growth and expansion of offerings.
Analysts' Forecast and US Policy Impact
According to a recent analysis by Bernstein analysts, a Donald Trump administration could create a favorable regulatory environment for cryptocurrencies, significantly increasing Robinhood’s revenue. The analysts suggest that under a more crypto-supportive Securities and Exchange Commission (SEC), Robinhood could expand its cryptocurrency offerings, which are currently limited under the current SEC leadership by Gary Gensler.
Crypto Offering Expansion and Financial Metrics
The report details that the trading platform has been conservative in its crypto offerings due to strict current regulations but anticipates that a change in leadership could lead to the listing of more tokens and the introduction of additional crypto-related products such as stablecoins and staking services. As a result, Bernstein has updated Robinhood’s revenue forecast for 2025 to $4.19 billion, an increase from the previous $3.85 billion estimate. Additionally, Bernstein has adjusted the target price for Robinhood’s shares from $30 to $51, reflecting a potential growth in market capitalization to above $45 billion, compared to its current trading price around $35.
Recent Strategic Moves by Robinhood
Despite regulatory constraints, Robinhood has demonstrated growth in its crypto revenues, which have increased by 160% year-over-year. The analysts believe Robinhood is poised to expand further, particularly into the EU and UK markets, by introducing new crypto products and enhancing its token listings. Robinhood’s recent strategic activities include the acquisition of crypto exchange Bitstamp for $200 million and its involvement in launching a new dollar-pegged stablecoin, indicating its commitment to enhancing its crypto services.
Considering these factors, analysts believe Robinhood is well-positioned for further growth, especially in light of the changing regulatory environment and strategic investments in cryptocurrency technologies.
