Robinhood price target raised by Deutsche Bank amid chain revenue growth

Deutsche Bank has raised its price target for Robinhood (HOOD) from $115 to $136, maintaining a ‘buy’ rating. The upgrade is driven by the rapid growth of revenue from the Robinhood Chain, an Ethereum-compatible Layer 2 network built on Arbitrum technology.

Recent data shows a significant surge in network revenue. While daily revenue was below $200,000 in mid-August, it rose to approximately $500,000 by the end of the month, eventually reaching peaks of over $4 million per day. Deutsche Bank estimates that Robinhood’s share of these revenues, based on a revenue-sharing model with Arbitrum, could exceed its previous third-quarter projections.

The network's fee structure has sparked debate within the industry. Solana co-founder Anatoly Yakovenko noted that the 10% revenue share Robinhood pays to Arbitrum is large enough to cover Solana's transaction fees approximately four times over. Yakovenko suggested these funds could potentially be used to subsidize user transactions, offering a gas-free experience. However, some analysts caution that the recent spike in fees may be a short-term trend and that actual accounting revenue may differ from total network fees due to revenue distribution and external protocol usage.