Robinhood (HOOD) plans to launch its own CFTC-licensed exchange for event contracts in a joint venture with Susquehanna International Group and Miami International (MIAX). This move sent HOOD shares soaring by 10%. Founded in 2013, Robinhood has nearly tripled its stock price this year and boasts a market cap of $115 billion.

The new exchange venture aims to become the go-to platform for prediction and futures contracts. This bold move could bring Robinhood more control over fees and margins on trades, as well as attract institutional participants. The company’s CEO sees prediction markets as a rapidly growing business opportunity.

Robinhood recently reported stellar Q3 earnings, with total revenue reaching $1.27 billion, up 100% year-over-year. Transaction-based revenue surged by 129% to $730 million, driven by a 300% increase in crypto trading. The company also saw strong growth in net income and diluted EPS, surpassing expectations on both revenue and earnings.

Despite strong performance, HOOD stock is considered expensive, trading at multiples significantly higher than its fintech peers. Wall Street’s consensus on the stock remains a “Moderate Buy,” with a 12-month price target of around $155. Analysts appreciate Robinhood’s execution but warn of the stock’s lofty valuation.

Read more at Yahoo Finance: As Robinhood Dives Into the Prediction Markets, Should You Buy, Sell, or Hold HOOD Stock?