Morgan Stanley has upgraded Robinhood Markets (HOOD) to Overweight from Equal Weight, citing underappreciated potential in how the platform monetizes its existing customer base.
The investment bank simultaneously raised its price target on shares to $150 from $124, implying roughly 43% upside from recent closing levels.
Analyst Michael Cyprys outlined the core argument in a note to clients, pointing to the platform’s expanding product suite as the engine behind improving customer economics.
“HOOD’s expanding platform is turning product velocity into stronger customer economics: more assets, activity and monetization per customer, supporting a longer growth runway than appreciated,” Cyprys wrote.
The thesis does not depend on aggressive new user acquisition, instead focusing on how much revenue Robinhood can generate from its current base of 28.4 million funded accounts.
Average revenue per user climbed 24% year-over-year to $187 in the second quarter of 2026, even as the funded customer base grew a comparatively modest 7%.
That combination of slowing user growth and accelerating revenue per user is precisely what Morgan Stanley believes the broader market has yet to fully price into the stock.
One of the more notable figures from Robinhood’s second-quarter results was the performance of event contracts and prediction markets, which generated $156 million in revenue during the period.
That figure outpaced crypto trading revenue in the same quarter, which came in at $100 million, underscoring the diversification now embedded in Robinhood’s business model.
Morgan Stanley’s upgraded outlook reflects confidence that Robinhood’s product lineup, spanning equities, options, crypto, prediction markets, retirement accounts, credit cards, and wealth management, creates multiple compounding monetization opportunities per user.
The previous Equal Weight rating and $124 price target had implied the stock was fairly valued at prevailing levels, offering little incentive for investors to add exposure.
The shift to Overweight signals that Morgan Stanley now sees a meaningful gap between where the stock trades and where the fundamentals point, assuming current monetization trends continue.
For investors watching the retail brokerage space, the upgrade positions Robinhood as more than a crypto-driven trading platform dependent on volatile digital asset markets for revenue growth.
