Shares of Robinhood Markets Inc. (HOOD) are rising after the fintech platform announced plans to expand into sports prediction markets. Investors responded positively, seeing the strategy as a potential new revenue stream that could attract a wider audience and boost engagement on the app. HOOD stock is up 0.80% in pre-market hours on Wednesday. Year-to-date, the stock is up more than 200%.
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Robinhood Launches New Features
Robinhood is expanding its fastest-growing product, prediction markets, by allowing users to place parlay-style bets across multiple NFL games. This move puts the platform in direct competition with traditional sports betting apps.
With the new launches, customers can now bet on the performance of individual professional football players through a new set of sports-focused contracts. Earlier, users could only wager on the final outcome of a game. Now, the new options allow more detailed bets, such as whether a player will score a touchdown or how many yards they will pass or run.
Robinhood Doubles Down on Prediction Markets Growth
Since launching late last year, prediction markets have become Robinhood’s fastest-growing product line ever by revenue, with more than 11 billion contracts traded by over 1 million customers. Despite the early success, the company says users are asking for more contracts and more advanced trading tools.
That said, the expansion comes as some state regulators push for tighter oversight of the industry. Critics argue that event contracts closely resemble sports betting and could encourage more speculative behavior among retail investors.
Despite the challenges, the company said it remains focused on delivering advanced tools, calling the move a key opportunity to establish leadership in the space.
Is HOOD a Good Stock to Buy?
According to TipRanks’ consensus, HOOD stock has a Moderate Buy rating, based on 15 Buys, five Holds, and one Sell assigned in the last three months. The Robinhood Markets share price target of $149.07 implies an upside of 25% over current trading levels.
