Investing.com -- Robinhood Markets Inc. (NASDAQ:HOOD) shares rose in pre-market trading on Monday after analysts at Needham upgraded the stock to a "buy" rating.

As per analysts at Needham, Robinhood is poised to benefit from potential shifts in SEC leadership following the recent U.S. presidential election.

Needham projects that a more crypto-friendly administration will enable Robinhood to expand its cryptocurrency offerings, a move already signaled by the platform's recent addition of four new crypto assets.

This expansion could position the company to compete more directly with established players like Coinbase (NASDAQ:COIN).

The note also flags Robinhood's strategy in targeting retail investors, particularly through its focus on meme-related assets, both in stocks and cryptocurrencies.

Such offerings resonate with a younger, more speculative demographic, aligning with Robinhood's core user base.

The analysts noted that meme coin trading volumes recently reached record highs, further bolstering the company’s growth potential in this space.

Additionally, Robinhood’s diversification into traditional equity and margin businesses provides a buffer against the volatility of cryptocurrency markets.

Analysts emphasized that this "one-stop-shop" model could attract more users as interest rates decline and retail trading volumes rebound.

The company’s recent steps to optimize its expense structure were also praised, with analysts forecasting continued improvements in EBITDA margins.

Needham set a price target of $40 for Robinhood’s stock, citing a favorable valuation based on the firm’s expected growth in revenue and market share.

This marks an upgrade from their previous "hold" rating and aligns with an optimistic outlook for Robinhood’s performance in 2025.

This endorsement underscores market optimism for Robinhood, particularly as it navigates both regulatory changes and the shifting dynamics of retail and crypto trading.

Shares of the financial services company were up 1.4% in pre-market trading.

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