The market is about right about Robinhood’s growth runway. I expect continued gains in trading and customer assets, but credit losses and investment spending limit the earnings benefit. My twelve-month target is $113.75 a share.
Key points
- $113.75 a share is my October 2027 target; growth supports holding, not chasing.
- $6.8 billion of forecast 2027 revenue assumes continued trading gains, not just new launches.
- $0.48 a share was Q2 2026 earnings excluding disclosed investment gains.
The call
The market is about right about the growth runway. At my assumed 40 times earnings, today's price requires $2.68 a share in 2027. With my cost assumptions, that means $6.6 billion of annual revenue and roughly a 49% operating margin, the profit left after operating costs.
Event contracts now rival equities revenue ($ millions)- Q2 2025 reported
- Q2 2026 reported
Source: Robinhood June 2026 Form 10-Q, filed July 29, 2026.
I expect growth, not a trading collapse. My 2027 forecast includes $1.8 billion from options and $1.05 billion from event contracts, bets on outcomes. August options activity remained strong, matching a healthy industry cycle. The early-2027 expense outlook will test whether new products turn that growth into profit.
Valuation
| My October 2027 valuation | Estimate |
|---|
| 2027 revenue | $6.8 billion |
| 2027 operating costs, including stock awards and credit losses | $3.4 billion |
| 2027 earnings per diluted share | $2.84 |
| Core business earnings multiple | 32 times |
| Product-platform premium | 8 times |
| Twelve-month target | $113.75 a share |
Earnings use a 22% tax rate, $50 million allocated to outside owners and 915 million diluted shares, including both share classes. Forty times rewards forecast 25% revenue growth in 2027, not an untested AI windfall. The platform story contributes $22.75 a share: customers keep more money here as products multiply; stalled deposits would end that premium.
How 2027 revenue changes my twelve-month targetAnalyst calculations, October 8, 2026; costs $3.4B, tax 22%, 915M shares, 40 times earnings.
My hold anticipates modest gains, with growth and valuation risks balanced.
Risks
- Trading could cool: watch monthly options contracts and revenue earned per contract; recent three-month underperformance tempers the six-month rebound.
- Credit cards could consume the gains: Q2 card loss provisions exceeded card net interest revenue; watch overdue balances and provisions excluded from expense guidance.
- Event-contract restrictions could spread: watch actual customer access and court orders, not launch headlines; higher rates support interest income but can discourage borrowing.
What would change my mind
Two quarters of annualized revenue above $7 billion without higher credit losses or operating costs would justify a higher target.