Investing.com -- Jefferies initiated coverage of Robinhood Markets with a Buy rating and an $88 price target in a note Thursday, arguing the company is positioned to evolve from a retail brokerage into a broad financial services “super app.”

Analyst Ritwik Roy told investors that Robinhood is “levered to rising global retail participation” and maintains a “unique ability to attract the next-gen investor,” which could make it a key beneficiary of what it estimates is a roughly $100 trillion generational wealth transfer.

At 26 times its 2027 earnings estimate, Jefferies said the stock offers “an attractive entry point.”

Jefferies highlighted Robinhood’s expanding customer base and balance sheet strength, noting that funded customers reached 27.4 million in February, up 7 percent year over year.

Total platform assets climbed 68 percent to $314.2 billion, while net deposits of $5.6 billion in February remained consistent with the 12-month average. Although trading activity has moderated, Jefferies said, “the longer-term growth backdrop remains constructive.”

The firm pointed to the company’s rapid product expansion, ranging from tokenization to custody, as a key driver of revenue diversification.

“Non-transactional revenues now make up 41% of total revenues, vs 23% in 2021,” analysts wrote, and are expected to rise to 43 percent in 2026 and 2027.

While near-term retail engagement has softened, Jefferies said profitability is improving and expects adjusted EBITDA margins to reach 58.2 percent in 2027.