Robinhood Stock Flat in Trading. New Crypto Offerings Impress Wall Street. — Barrons.com

By Nate Wolf

Robinhood Markets stock inched up Tuesday on a slate of new crypto products from the company.

On Monday, at an event on the French Riviera, the company unveiled tokenized stocks and exchange-traded funds, crypto perpetual futures, crypto "staking," and many other digital offerings for both U.S. and European customers. The stock ended the day up 13%.

In Tuesday's afternoon trading, Robinhood gained 0.4% to $93.96.

A host of research notes praised Robinhood's growing geographic footprint and rapid introduction of new offerings, making clear the company wants to position itself as a one-stop-shop financial services business.

"HOOD's incredible product velocity makes it hard to keep up with innovation," Mizuho's Dan Dolev wrote in a research note Tuesday. He reiterated an Outperform rating for the stock and raised his target for the price to $99 from $80.

Dolev highlighted three particular offerings from the presentation in Cannes, France. Two were for customers in the European Union and one was for both Europeans and Americans.

In the EU, users will now have access to more than 200 tokenized U.S. stocks and ETFs, which follow the prices of the underlying equities, but are issued via blockchain technology rather than traditional exchanges. The company also unveiled perpetual crypto futures, which allow users to make levered crypto trades. It expanded the availability of crypto trading to the entire European Economic Area from a previously limited set of countries.

Both U.S. and European users, meanwhile, can now engage in crypto "staking" on Robinhood's platform. That means holders can now receive a yield on their tokens for locking them up as collateral to help validate transactions and secure the blockchain network.

"We believe today's announcement is largely EU-focused, and should help the company quickly penetrate markets outside the U.S.," wrote Cantor Fitzgerald analyst Brett Knoblauch in a research note.

The tokenized equities, in particular, may be difficult to implement in the U.S. at this juncture, Knoblauch said. But they clear a major hurdle for EU investors by providing access to U.S. markets, and Robinhood can collect a 0.1% transaction fee from the currency conversions.

Altogether, the new offerings provide substantial earnings potential, Knoblauch concluded. Calling Robinhood a "must-own name in the sector," Cantor reiterated an Overweight rating on the stock and raised its target for the price to $100 from $89.

Alex Markgraff at KeyBanc Capital Markets was similarly bullish. KeyBanc reiterated an Overweight rating for Robinhood and nearly doubled its price target to $110 from $60, reflecting both the announcements and data about the performance of existing products during the current quarter.

Robinhood has a "clear road map for expansion," Markgraff wrote, saying the new products not only highlight its innovation, but are also expanding the company's potential market.

As of the close of trading on Monday, Robinhood stock was up 311% over the past 12 months and 151% so far this year.

Write to Nate Wolf at nate.wolf@barrons.com

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