Online brokerage Robinhood reported impressive second-quarter 2025 results, with revenue surging 45% year-over-year to $989 million and net profit doubling to $386 million. Earnings per share (EPS) stood at $0.42, significantly surpassing market expectations. The platform's assets under management nearly doubled to $279 billion, driven by market gains, while the company added 2.3 million funded accounts over the past year, bringing the total to 26.5 million.

However, concerns over valuation bubbles have emerged as Robinhood's stock has soared 278% year-to-date. On November 1, Zacks Research downgraded the stock from "Strong Buy" to "Hold," citing a price-to-book ratio of 15.39x—far above the industry average of 2.37x.

Despite this, most analysts remain optimistic about the company's growth momentum. Compass Point raised its target price from $105 to $161 in late October, citing rapid expansion in the prediction market business, which is projected to generate over $200 million in annual revenue. Among 22 analysts, the consensus includes 13 "Buy," 8 "Hold," and 1 "Sell" ratings, with an average target price of $142.26.

Robinhood has aggressively expanded into prediction markets, partnering with Kalshi to offer binary options contracts covering politics, sports, and Federal Reserve policies. Over 100 new events will be added in the coming weeks. The company also hinted at potential mergers and acquisitions in this space to accelerate growth. Currently, Robinhood users account for 25%-35% of Kalshi's daily trading volume, marking a key driver for its new growth trajectory.