Key Points
Company performance metrics and football could become massive prediction categories.
Robinhood is well placed to profit from both.
Shares of Robinhood Markets (NASDAQ: HOOD) popped on Thursday after analysts highlighted the potential of new prediction markets to drive the trading app's expansion.
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Betting on a company's performance
Investors already view prediction markets as a key growth opportunity for Robinhood. But Deutsche Bank analyst Brian Bedell has a new take.
Bedell predicts that contracts for businesses' financial key performance indicators (KPIs) will become the largest event-contract category within prediction markets.
"For the U.S., we believe company KPI contract volume could surpass 1 trillion in 2028 from virtually nothing today, exceeding sports volumes, even in any positive SCOTUS [Supreme Court of the United States] ruling in favor of national regulation," Bedell said.
Bedell believes Robinhood is one of the companies best positioned to profit from this high-potential new trading market.
Profiting from America's favorite sport
Bedell isn't the only one who's getting more positive on Robinhood's prospects. Piper Sandler analyst Patrick Moley thinks football will be another powerful growth driver for Robinhood's prediction market revenue.
Moley points to the "explosive" gains driven by the World Cup as a sign of what's to come in the U.S. during the NFL and NCAA football seasons. He expects the impact to be visible in Robinhood's upcoming third- and fourth-quarter results.
In turn, Moley sees Robinhood's share price rising roughly 16% to $145.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.