CHONGQING, CHINA – JULY 28: In this photo illustration, a smartphone displays the logo of Robinhood Markets Inc. (NASDAQ: HOOD), an American financial technology company known for its commission-free stock and cryptocurrency trading platform, in front of a screen showing the company’s latest stock market chart on July 28, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
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Is it possible for Robinhood Markets (NASDAQ:HOOD) stock to increase from its current value of $115 to $230 in the years to come? We believe it is a possibility. Take into account that the stock was priced around $55 in mid-May 2025 and has already surged by nearly 2x in less than 3 months. When analyzing the valuations, HOOD stock is trading at approximately 60x adjusted trailing earnings. While this may seem pricey initially, the company has shown remarkable earnings momentum, a rapidly growing customer base, and is making significant strides in the booming cryptocurrency sector. In the scenario that follows, we utilize HOOD’s revenues, margins, and valuation multiples to illustrate a potential trajectory towards a stock price exceeding $200 in the near future.
Big Revenue Potential
HOOD’s revenues have significantly increased from $280 million in 2019 to approximately $2.9 billion in 2024, reflecting an annual growth rate of nearly 60%. Growth has averaged around 30% over the past three years. It appears that this momentum can be sustained. Consensus forecasts indicate about 35% revenue growth for 2025, bringing it to around $4 billion. Moreover, there is a real opportunity for HOOD to maintain this average annual growth rate of close to 35% for the next few years, driven by ongoing customer growth, substantial potential in the crypto sector, and wealth management solutions.
In light of this, revenues could rise from a projected $4 billion in FY’25 to roughly $7.3 billion by FY’27, representing an increase exceeding 82%. Here’s a detailed look at the factors that could drive this growth. Additionally, if you seek potential gains with less volatility compared to individual stocks, the Trefis High Quality portfolio provides an alternative – having outperformed the S&P 500 and yielding returns of over 91% since its inception.
Expanding and Monetizing a Larger Customer Base: Robinhood has proven to be nimble and innovative, with a solid grasp of young retail investors, resulting in robust user growth. Funded accounts surged by 2.3 million last quarter to total 26.5 million, while platform assets nearly doubled year-over-year, reaching $279 billion. This expanding asset base serves as a revenue driver, promoting increased trading activities, higher interest income on idle cash, and greater potential for advisory fees.
Deepening Push Into Crypto: Crypto revenues skyrocketed 98% last quarter to $160 million, just shy of marking the sixth consecutive quarter of triple-digit growth. The company is also growing its operations through acquisitions. Recently, it finalized its acquisition of global cryptocurrency exchange operator Bitstamp, which grants it access to over 50 active licenses and registrations worldwide, while also bolstering its enterprise initiatives with improved lending and staking infrastructure and offering specialized products tailored for hedge funds, fintechs, and registered investment advisors. A more favorable regulatory environment and increasing political backing, including from the Trump administration, have further bolstered investor enthusiasm for the stock.
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Catching Them Young: Robinhood’s user demographic is predominantly made up of millennials and younger investors. A substantial wealth transfer is anticipated to occur from older generations to millennials and Gen Z over the next two decades, amounting to tens of trillions of dollars. By acquiring these users early, Robinhood positions itself to take advantage as their assets and investment needs grow over time. As millennials progress, their financial requirements will diversify. In response, Robinhood has started to offer products beyond simple trading – such as retirement accounts, high-yield cash balances, and wealth management tools – to retain users as their financial standing improves. While this may be a long-term strategy for the stock, it holds significant importance.
Operating Leverage Will Drive Margins
This substantial revenue growth combined with the fact that HOOD’s adjusted net margins (net income, or profits after all expenses and taxes, expressed as a percentage of revenues) are on an upward path – increasing from negative levels in FY’21 to about 35% in FY’24. This growth has been propelled by notable gains in high-margin revenue channels such as payment for order flow and margin interest. A considerable increase in transaction volumes, especially in crypto, has also contributed positively to the company.
Robinhood’s business model exhibits significant operational leverage since costs do not necessarily have to increase in proportion to revenues. Margins could potentially climb further to approximately 40% given these trends. Now, by merging 40% adjusted net margins with around $7.3 billion in revenue, we would arrive at earnings of approximately $2.9 billion. This represents nearly a 2.9x increase from figures recorded in 2024.
Strong Results Mean A Smaller Contraction In P/E Multiples
Now, if earnings grow 2.9x, the price-to-earnings multiple will contract by 2.9x, from approximately 21x, provided the stock price remains constant. However, that’s precisely what HOOD investors are banking on not occurring. If earnings do indeed expand 2.9x in the next few years, instead of the P/E ratio decreasing from around 60x to about 21x, a scenario in which the PE metric holds at approximately 40x seems more plausible, as robust growth and enhanced margins instill greater confidence about HOOD’s future in investors.
This scenario would make the growth of HOOD stock to levels near $230 within the next few years a tangible possibility. So what about the timeline for this high-return scenario? While our example indicates a time frame of around two years, in reality, the distinction between two years and three years won’t be significant, as long as HOOD continues on this revenue expansion path with margins sustaining; the stock price could respond in a similar manner.
While HOOD stock appears encouraging, investing in a single stock can carry risks. Conversely, the Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, has a history of comfortably outperforming the S&P 500 over the last four-year span. Why is that? Collectively, HQ Portfolio stocks have provided superior returns with lower risk compared to the benchmark index; a smoother ride, as demonstrated in HQ Portfolio performance metrics.