CHONGQING, CHINA – JULY 28: In this photo illustration, a person holds a smartphone displaying the logo of Robinhood Markets Inc. (NASDAQ: HOOD), a U.S.-based financial technology company known for its commission-free stock and cryptocurrency trading platform, with the company’s green feather emblem visible in the background, on July 28, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
Getty Images
Robinhood Markets (NASDAQ:HOOD) has experienced an exceptional performance in 2025, with its momentum receiving an additional boost. The firm was recently included in the S&P 500, causing its shares to rise over 7% in pre-market trading on Monday, nearing $110 per share. Robinhood, renowned for abolishing trading commissions and making stock investing more accessible through its user-friendly mobile application, has seen its stock price increase by more than 2.5 times since the beginning of January. This growth has been fueled by strong earnings momentum, a rapidly growing user base, and increasing involvement in the booming cryptocurrency market.
Now, the inclusion in the S&P 500 could spark another surge. Being part of the index typically provides stocks a structural advantage as passive investment funds and ETFs that track the benchmark must purchase shares. Additionally, it acts as a mark of reliability and financial stability, attracting increased attention from institutional investors.
So, is it possible for Robinhood’s stock, currently around $115, to double again to $230 in the next few years? The premise isn’t unrealistic. Consider that the stock was valued at merely $55 in mid-May 2025, having already doubled in just over three months. While the valuation appears to be around 60 times adjusted trailing earnings at first glance, coupled with rising profitability and expanding market prospects, there exists a feasible path to a stock price exceeding $230. In the subsequent sections, we analyze Robinhood’s revenues, margins, and valuation multiples to outline how this scenario could materialize.
For investors seeking growth opportunities while reducing risk linked with the high volatility of individual stocks, we recommend checking out the High Quality Portfolio. This portfolio has demonstrated an outstanding performance record since its inception, consistently outperforming its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indices—with cumulative returns exceeding 91%, as shown in HQ performance metrics.
Big Revenue Potential
HOOD’s revenues have significantly increased from $280 million in 2019 to approximately $2.9 billion in 2024, reflecting an average annual growth of nearly 60%. Over the past three years, growth has averaged around 30%. It appears that this momentum can be sustained. Consensus forecasts suggest nearly 35% revenue growth for 2025, bringing it to around $4 billion. Nonetheless, there is an immense opportunity for HOOD to sustain this annual growth rate of approximately 35% over the next several years, fueled by continued customer growth, substantial potential in the crypto sector, and wealth management services.
Given this, revenues could rise from an estimated $4 billion in FY’25 to roughly $7.3 billion by FY’27, representing an increase of over 82%. Here’s a detailed look at the factors that could drive this growth. Separately, if you are in search of potential gains with decreased volatility compared to individual stocks, the Trefis High Quality portfolio serves as an alternative—having outperformed the S&P 500 and delivered returns exceeding 91% since its launch.
Monetizing a Larger Customer Base: Robinhood has demonstrated agility and innovation, possessing a keen understanding of younger retail investors, leading to robust user growth. Funded accounts vaulted by 2.3 million last quarter, reaching 26.5 million, while platform assets nearly doubled year-over-year, totaling $279 billion. This expanding asset base acts as a revenue engine, enabling increased trading activity, higher interest earnings on idle cash, and greater potential for advisory fees.
Push Into Crypto: Robinhood’s crypto revenues soared by 98% last quarter to $160 million, just short of a sixth consecutive quarter of triple-digit growth. The company has also been broadening its operations through acquisitions. It completed the acquisition of global cryptocurrency exchange operator Bitstamp in June, granting it over 50 active licenses and registrations worldwide, and enhancing its enterprise capabilities by bolstering its lending and staking infrastructure and providing more specialized products aimed at hedge funds, fintech firms, and registered investment advisors. An increasingly favorable regulatory environment and growing political support, including backing from the Trump administration, have further stimulated investor enthusiasm for the stock.
A Valuable, Young Demographic: Robinhood’s user base is predominantly made up of millennials and younger investors. A significant transfer of wealth is projected to occur from older generations to millennials and Gen Z over the next two decades, amounting to tens of trillions of dollars. By attracting these users early, Robinhood positions itself to profit as their assets and investment requirements evolve over time. As millennials mature, their financial needs will diversify over time. In light of this, Robinhood has begun to introduce products beyond mere trading—such as retirement accounts, high-yield cash balances, and wealth management tools—to retain users as their financial positions improve. While this might be a longer-term strategy for the stock, it is critically important.
Why Margins Will Expand
Combine this robust revenue growth with the fact that HOOD’s adjusted net margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) are on an upward trend. They have risen from negative levels in FY’21 to roughly 35% in FY’24. This growth has been driven by significant increases in high-margin revenue streams, such as payment for order flow and margin interest. A strong increase in transaction volumes, especially in crypto, has also aided the company. Robinhood’s business model features substantial operational leverage, as costs do not necessarily increase in proportion to revenues. Margins may potentially trend even higher to levels around 40% in light of these trends. Now, integrating 40% adjusted net margins with approximately $7.3 billion in revenue would result in earnings of about $2.9 billion. That’s roughly a 2.9 times increase compared to the figures seen in 2024.
Strong Results, Lower P/E Contraction?
Now, if earnings increase by a factor of 2.9, the price-to-earnings multiple will contract by a factor of 2.9, from approximately 21 times, assuming the stock price remains constant. However, that’s exactly what HOOD investors are banking will not occur. If earnings grow 2.9 times over the next few years, rather than the P/E ratio declining from a current 60 times to about 21 times, a scenario where the P/E multiple remains around 40 times seems more plausible, as strong growth and improving margins boost investor confidence in the future of HOOD stock.
The company’s inclusion in the S&P 500 could further sustain a higher multiple, due to the increased visibility, index fund flows, and broader institutional involvement that usually accompany such inclusion. This would make the rise of HOOD stock to over $220 within the next few years a tangible possibility. So, what about the timeline for this high-return scenario? While our example stated above suggests a timeline of about two years, in practice, it won’t make much difference whether it takes two years or three, as long as HOOD continues on its revenue expansion trajectory, and with margins holding steady, the stock price could reflect similar responses.
Although HOOD stock appears promising, investing in a single stock can carry risks. Conversely, the Trefis High Quality (HQ) Portfolio, which comprises a selection of 30 stocks, has a history of comfortably outperforming the S&P 500 over the last four-year span. Why is this the case? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; providing a steadier investment experience, as demonstrated in HQ Portfolio performance metrics.
