The old Robinhood story was simple: commission-free trades, a generation of first-time investors, and a revenue model built on payment for order flow. That story is over. What replaced it is why four Wall Street desks re-rated HOOD within 48 hours, and why the stock was trading higher in early Thursday action on unusually active options flow.

The Re-Rating in Full

On September 1, Morgan Stanley analyst Michael Cyprys lifted HOOD to Overweight from Equal Weight, raising his price target to $150 from $124. The call was not about user growth. Morgan Stanley’s argument is that Robinhood is getting meaningfully better at monetizing the customers it already has, citing underappreciated potential across event contracts, banking services, and digital asset products.

A day before, Bernstein reiterated its Outperform at $160, implying more than 50% upside from recent levels. On September 2, Scotiabank initiated at Sector Outperform with a $136 target, specifically flagging Robinhood’s newer business lines. Piper Sandler raised its target the same day to $145 from $135, citing prediction market volume projections heading into football season.

Four separate calls. One coherent thesis: this is no longer a commission story.

What the Numbers Actually Show

The Q2 2026 results released July 29 tell the story directly. Total net revenue hit a record $1.31 billion, up 32% year over year, with adjusted EBITDA of $741 million at a 57% margin. EPS came in at $0.62, beating the consensus estimate of $0.41 by more than 50%.

The more telling figure: average revenue per user climbed 24% year over year to $187 in Q2, even as the funded customer base grew a more modest 7% to 28.4 million accounts. Robinhood now runs 13 distinct business lines each generating more than $100 million in annualized revenue.

Prediction markets alone generated $156 million in event-contract revenue in Q2, overtaking crypto trading’s $100 million as crypto volumes eased across the industry. Bernstein projects prediction market revenue could reach $1.7 billion annually by 2028, growing at a 64% compound annual rate.

The Infrastructure Bet

Beyond prediction markets, Robinhood Chain, its Arbitrum-based layer-2 blockchain, has launched mainnet and is being positioned as infrastructure for tokenized real-world assets. Stock tokens are now available across more than 120 countries, enabling round-the-clock exposure to tokenized equities.

This is the architecture Morgan Stanley and Bernstein are pricing, not the retail brokerage from 2021.

Risks Worth Watching

The Ninth Circuit’s August 28 ruling that Nevada can enforce its gaming laws against Robinhood’s sports-related event contracts created a direct headwind for Robinhood’s prediction market ambitions. The court upheld the denial of Robinhood’s request for injunctive relief. The ruling conflicts with a Third Circuit decision from April, creating a circuit split that most legal observers expect could reach the Supreme Court. Until that question is resolved, the sports-event contract segment carries regulatory uncertainty that does not appear in any price target.

HOOD also trades at a P/E above 45, a premium that leaves little room for execution shortfalls. Crypto-related stocks including Coinbase (COIN) have faced selling pressure recently, and Robinhood’s high beta can amplify moves in both directions. Competitors such as Interactive Brokers (IBKR) and Schwab (SCHW) are not standing still on digital asset and prediction market access either.

The Bigger Picture

What the four analyst calls collectively signal is a recognition that Robinhood has successfully diversified away from the single-variable crypto sensitivity that defined its earlier cycles.

Management is presenting at the Goldman Sachs Communacopia and Technology Conference on September 9, which may bring additional investor attention. Whether the stock reaches $136, $145, $150, or $160 depends on how the prediction market legal landscape develops and whether football season delivers the volume surge Piper Sandler is modeling. Both are live questions. What is not a question: Robinhood’s revenue mix looks structurally different than it did 18 months ago, and Wall Street is only now catching up to that reality.