Investing.com -- In a note to clients on Friday, BTIG initiated coverage of Robinhood Markets with a Buy rating and a $125 price target, arguing the retail brokerage and wealth management platform is poised to compound assets at more than 20% annually over the next decade through demographic tailwinds, product expansion and international growth.

Analyst Andrew Harte described Robinhood as "born to disrupt, built to compound," saying the company has evolved well beyond its commission-free trading origins to encompass crypto, prediction markets and wealth management.

Management's stated ambitions include becoming the top platform for active traders, the leading platform by wallet share for the next generation, and the world's number one financial ecosystem.

BTIG said Robinhood is "structurally advantaged to grow faster than legacy competitors," noting its average customer is 36 years old with a $13,000 average account balance, compared to legacy platforms serving retirement-age users with $200,000 balances.

The bank said Robinhood's priority is to keep customers on the platform rather than allowing them to graduate to legacy platforms.

On valuation, BTIG acknowledged Robinhood trades at 46x next-twelve-month GAAP EPS versus incumbent peers at around 15x, but said the premium is justified by the company's growth algorithm and "laundry list of nascent growth drivers," including Trump Accounts, international expansion and pattern day trading restriction elimination.

Near-term, BTIG highlighted monthly options contract volumes of approximately 818 million versus the consensus of 671 million as a sign that key performance indicators are tracking ahead of expectations.