Goldman Sachs research report interpretation: HOOD crypto trading exceeds consensus by 87%, interest rate curve boosts target price

Written by: Rita

Goldman Sachs raised the 12-month target price for Robinhood (HOOD) from $144 to $145, maintaining a Buy rating. In its preliminary monthly data report released on September 28, 2026, Goldman Sachs pointed out that HOOD's September trading data exceeded expectations, with crypto and event contract volumes up 21% and 37% month-over-month, surpassing market consensus by 87% and 36%, respectively. Stock and options trading volumes edged down slightly month-over-month, but still exceeded market expectations by 17% and 43%, respectively.

Goldman Sachs analyst James Yaro noted that the preliminary September data supports an upward revision in revenue forecasts. Goldman Sachs raised its net revenue forecasts for 2026 to 2028 by 1%, 4%, and 4%, respectively, while adjusted earnings per share estimates changed by -1%, +4%, and +3%. The increase in the target price reflects both changes in valuation multiples and earnings expectations.

Strong Crypto and Prediction Market Trading Volumes

Crypto trading volume grew 21% month-over-month in September, reaching $21.9 billion, beating market consensus by 87% and Goldman Sachs’ previous forecast by 17%. Event contract trading volume increased 37% month-over-month, 36% above market consensus and 6% higher than prior Goldman Sachs forecasts. These two metrics were the most notable positive surprises in September. The HOOD app’s September trading volume, adjusted, was $13.55 billion, also above previous expectations.

Stock trading volume fell 2% month-over-month, options volume fell 1%, but both remained above market consensus. Stock trading volume was 1% higher than Goldman Sachs’ previous estimate, while options volume was in line. Year-on-year, stock trading volume grew 38% and options increased 32%, indicating retail trading activity remained well above last year’s levels.

Steeper Yield Curve Boosts Revenue

A steeper yield curve is the second driver for the revenue upgrade. Goldman Sachs updated its market forward rate curve, implying about 3.5 more Fed rate hikes by the end of 2027 compared to the previous model. The steeper yield curve supports HOOD's net interest income, leading Goldman Sachs to raise its revenue estimates accordingly.

Goldman Sachs raised its 2026 net revenue forecast from $5,359.4 million to $5,404.8 million, for 2027 from $6,852 million to $7,104 million, and for 2028 from $7,927.7 million to $8,272.2 million. Adjusted expenses (excluding equity compensation) were raised by 1%, 4%, and 6%, respectively. Adjusted earnings per share for 2026 went down from $2.53 to $2.51, for 2027 up from $3.18 to $3.30, and for 2028 up from $3.76 to $3.89.

In terms of valuation, Goldman Sachs lowered its Q5 to Q8 price-to-earnings multiples by 1.5 times to 40x, reflecting a decline in market multiples. The $145 target price corresponds to roughly a 44x 2027 earnings multiple based on projected earnings per share of $3.30.

Slight Target Price Increase Reflects Higher Earnings Expectations

The target price was raised slightly from $144 to $145, with the current stock price at $116.46, representing about 24.5% upside. Goldman Sachs notes that HOOD’s valuation multiple is higher than traditional brokers, reflecting the high-growth nature of its retail trading platform. The sustainability of crypto and event contract volume, yield curve changes, and the pace of new product introductions are key variables for the next few quarters.

Goldman Sachs raised the target price from $144 to $145, mainly reflecting that the upward revision in profit forecasts was offset by a lower valuation multiple. Whether crypto and event contract trading volume growth can be sustained will determine whether HOOD can maintain a valuation multiple above 40x.