Robinhood Price Target Raised as Firm Moves to Strengthen Crypto Presence

Robinhood Markets' stock (NASDAQ: HOOD) has been a huge outperformer in recent times, with a 55% gain YTD backing up a strong 2024. With the HOOD price having added 231% over the past 12 months, the company is not intent to sit still, with the recently announced acquisition of WonderFi Technologies Inc. (WONDF), a Canadian cryptocurrency platform.

The acquisition involves a purchase price of $0.26 per share. This represents a 41% premium over WonderFi’s closing price on May 12 and a 71% premium over its 30-day volume-weighted average price. The combined equity value of the transaction, on a fully diluted basis, is approximately $178 million.

This move has been notably praised by Kevin O'Leary, a founding shareholder of WonderFi, who views the acquisition as transformative for cross-border trading.

WonderFi operates well-regulated Canadian crypto exchanges, Bitbuy and Coinsquare, which together hold $1.49 billion in assets under custody. The deal is projected to close in the latter half of 2025, pending required approvals, with no anticipated changes in leadership.

The transaction is seen as a significant step in Robinhood's expansion efforts, particularly in the cryptocurrency market in Canada. J.P. Morgan Securities is serving as the advisor for Robinhood, while Financial Technology Partners is advising WonderFi on the deal.

Sentiment on the street remains bullish, with upgrades from Deutsche Bank ($64 from $54), Morgan Stanley ($43 from $40), and BofA ($65 from $60) all coming in the past couple of days. The consensus price target of $61.34 is now marginally below the current price action on the stock however, with the acceleration in price of HOOD outpacing the street.