Robinhood is projected to generate $20 million in revenue from prediction markets for the third quarter, as highlighted by an analyst’s latest report, representing a significant increase from the previous quarter’s revenue. The forecast anticipates a further climb to $50 million in Q4.
The platform is experiencing growth across various sectors — including equity, options trading, prediction markets, and cryptocurrency fees — leading Compass Point to elevate its price target from $105 to $161 while maintaining a Buy recommendation on the stock.
According to Compass Point Research & Trading analyst Ed Engel and his team, they foresee Robinhood “to unveil metrics for October that significantly exceed 4Q expectations.” The firm retained its Buy rating, attributing the higher revenue to multiple sectors, particularly equities, prediction markets, and crypto services.
Engel pointed out that the company’s earnings forecast displays robust momentum stemming from a surge in trading activities. Analysts are optimistic about continued revenue increases from new products, especially Robinhood’s prediction markets and staking options.
Introduced earlier this year, the trading platform’s prediction markets have gained substantial user engagement. This feature allows traders to place contracts on real-world outcomes, including sports results, government policy changes, or shifts in digital asset prices.
“We estimate HOOD will generate approximately $20 million in prediction market revenue for Q3, which marks over a 100% increase quarter-over-quarter,” Engel stated. Robinhood’s CEO Vlad Tenev disclosed on X last month that the platform has seen over 4 billion event contracts since its launch, with more than 2 billion executed in the third quarter.
Analysts approximate that Robinhood earns about $0.01 for each contract, leading to an estimated revenue of roughly $40 million. Engel anticipated further growth for the fourth quarter, asserting, “We predict HOOD’s 4Q prediction revenue will reach approximately $50 million, coinciding with a full NFL season.”
Engel also highlighted the activity in the cryptocurrency sector as an additional revenue source for Robinhood. The firm expects a rise in income from transaction fees and staking, which allows users to secure digital tokens and receive regular rewards.
“We think the Street is underestimating HOOD’s crypto revenue forecasts for the latter half of 2025 and 2026, which incorporates increased fee rates and staking revenue,” Engel mentioned.
Following the Compass Point announcement, Robinhood shares surged by as much as 5% on Monday. This stock has seen a remarkable rise of more than 250% year-to-date and joined the S&P 500 Index (^GSPC) last month, currently holding 20 Buy ratings, eight Hold, and one Sell recommendation among analysts.