Robinhood Stock Soars as Wall Street Backs Crypto and Private-Market Push

Roninhood Markets Inc.'s stock surged as Wall Street backed its push into crypto and private-market trading. The company's shares rose by 13.8% after Goldman Sachs lifted its price target to $123 from $118, while FactSet showed an overweight rating with an average target of $124.73.

The growth story is driven by Robinhood's expansion into closed-end funds that hold private-company stakes and its introduction of cryptocurrency trading in the UK using Bitstamp UK as its FCA-registered partner. The company plans to accelerate launches of these funds, which will give retail access to private companies.

Robinhood Ventures Fund II (RVII) priced an 8 million share IPO at $25, targeting $225.5M-$255.5M to invest in early-stage and Y Combinator-linked startups on the NYSE. The SEC's work on tailored crypto rules and an 'innovation exemption' for tokenized securities could allow Robinhood to bring tokenized stock trading into the US.

The company's fundamentals show high-growth and high-valuation, with revenue growth above 40% over three years and gross margin around 86.3%. However, the valuation is rich, with a P/E of 42.56 and a price-to-sales ratio of 17.46.