Robinhood (NASDAQ:HOOD) stock has staged a strong rebound, jumping about 33% from its late-March lows. Yet, despite the recent recovery, the shares remain down 23% for the year, weighed down by a mix of lower trading volumes, reduced cryptocurrency-related revenue, and concerns over a softer macro backdrop that have contributed to a broader risk-off environment.
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With the trading platform’s Q1 earnings coming up on April 28, Bernstein analyst Gautam Chhugani thinks a weak Q1 print is “already priced in” and he anticipates the market will be “forward looking.” As such, Chhugani sees an “asymmetric upside potential in HOOD driven by recovery in crypto markets and breakout revenue growth in prediction markets.”
For 2026E, Chhugani is 9% above consensus on revenue and 16% above on EPS, primarily driven by stronger confidence in a crypto recovery (31% above consensus) and prediction markets (30% above consensus on other transaction revenue). For 2027, Chhugani remains 18% above consensus on revenue and 25% above on EPS, again supported by crypto and prediction markets.
Chhugani’s more constructive take on the strength of a crypto rebound is based on the view that Bitcoin has already bottomed and that a meaningful rebound should begin from Q2 onwards. The analyst forecasts crypto revenues rising 23% year-over-year to $1.1 billion, representing about 23% of the increase in transaction-based revenues and roughly 15% of total revenue growth. A broader crypto price recovery in the second half of the year should support higher retail engagement and improved take rates. Bitstamp, which Robinhood acquired for $200 million last June, has been a “key differentiator,” reflecting a rapid ramp in institutional activity and contributing around 60% of total crypto volumes.
In prediction markets, Chhugani expects revenue to rise from approximately $150 million in 2025 to around $586 million in 2026E, implying 286% year-over-year growth. This segment is expected to represent about 17% of transaction-based revenues and roughly 10% of total revenue in 2026E, and to be the “largest incremental driver of growth,” contributing around 50% of the uptick in transaction-based revenues and about 30% of total revenue growth. Chhugani also sees 2026 as a “catalyst-rich” year for prediction markets, supported by the U.S. hosting the Football World Cup in the summer and heightened political activity in the second half of the year ahead of the U.S. midterm elections.
“Structurally,” Chhugani added, “HOOD has a long growth runway representing mere 4% of total broking revenue TAM, as it continues taking retail trading share (14% rev. share in 2025 vs. 11% in 2024 – including new asset classes – crypto, predictions) and grows its share of banking & advisory revenue pools through new product launches.”
So, down to business, what does all of this actually mean for investors? Chhugani rates HOOD as Outperform (i.e., Buy), while his $130 points toward one-year gains of ~50%. (To watch Chhugani’s track record, click here)
Most of Chhugani’s colleagues agree with that stance; based on 14 Buys vs. 3 Holds, the analyst consensus rates HOOD a Strong Buy. The forecast calls for 12-month returns of 20%, considering the average price target clocks in at $104.56. (See HOOD stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.