Robinhood Markets (HOOD) is no longer just a trading app. After several challenging years, the company is emerging as a leaner, more capital-efficient fintech platform with real earnings power and product depth. I believe the market is still pricing Robinhood based on its past—volatile volumes, regulatory overhang, and meme-era noise. Instead, a more focused and diversified platform with expanding margins, new growth channels, and improving engagement economics is unfolding before our very eyes.
In FY2024, Robinhood generated GAAP EPS of $1.56 alongside 58% year-over-year revenue growth. It ended the year with over $4.3 billion in cash. Operating margins expanded significantly, and the net income margin surpassed 45%. That combination of profitability and cash optionality is exactly what I look for in a long-term compounder. As a result, I’m stoutly bullish on HOOD stock.
Core Expansion Into Bleeding-Edge Markets
Robinhood’s product strategy now revolves around deepening its relationship with existing users. This is best demonstrated by the rollout of Robinhood Strategies, a robo-advisory service with a low, transparent fee structure that targets younger, asset-accumulating investors. With 70% of users under age 40, Robinhood is positioning itself to retain and grow with this demographic over the next two decades.
The upcoming Robinhood Banking product extends that strategy, offering checking and savings accounts with high yields and estate planning tools. Cortex, its AI assistant, will add intelligent interaction for traders and investors alike. These are not standalone features, but foundational components of a growing financial platform that caters to the modern crowd.
Higher Margins and More Monetization
Beyond equities, Robinhood’s business mix is tilting toward high-margin verticals. Options and crypto trading already make up most of transaction revenue and carry far higher monetization per user. Robinhood Gold, the company’s subscription tier, provides recurring revenue with virtually no marginal cost while stimulating more trading volumes.
The company’s move into prediction markets may turn out to be one of its most profitable investments. Partnering with Kalshi, Robinhood has introduced “real-world event trading”, letting users speculate on outcomes like interest rates or elections. I see this business alone potentially contributing over $250 million annually in revenue. With a $95 billion market projected by 2032 and low marginal costs, it’s a tangible lever for incremental, scalable income.
Interest income also remains a strong earnings contributor. With short-term rates still elevated, Robinhood is earning attractive spreads on margin loans, stock lending, and customer cash balances—about 30% of total revenue in Q4. These flows require little capital and bring durable margin benefits even in slower trading environments. Robinhood’s Q1 2025 results are scheduled for April 30th, with analysts anticipating further upticks in HOOD’s performance.
Valuation Looks Attractive for Alpha Generation
At current levels in the low-$40s, Robinhood trades at approximately 26x trailing GAAP earnings. That multiple looks conservative considering the company’s top-line growth, expanding margins, and evolving product stack. Historically, Robinhood traded at much higher valuations, based on sales, not profits. Now, it is profitable, growing, and arguably underappreciated.
If Robinhood can maintain its current margin structure and deliver even modest top-line growth, its PEG ratio becomes compelling. There’s also ample financial flexibility—no debt and nearly $5 billion in cash—to reinvest, acquire, or return capital. Optionality for outsized growth in niche offerings is embedded across its ecosystem.
With revenue shifting toward recurring and high-margin streams, the current multiple may understate Robinhood’s normalized earnings power. A re-rating to 32.5x earnings would place fair value closer to $50 per share in the near term, implying around 20% upside in the near term and at least 35% in 12 months without heroic assumptions.
The stock has broken key resistance levels, reclaimed its IPO price, and held above the 50-week moving average. 14-week RSI levels remain healthy in the 50–60 range after peaking near 90 in March. Consolidation after the Q4 earnings beat and Kalshi announcement appears constructive, with higher lows and substantial volume on up days suggesting accumulation rather than distribution moving forward. From a technical standpoint, momentum supports the bullish investment case. The longer the stock holds its gains near the mid-$40s, the more likely it is to base for another move higher.
Macro Tailwinds and Risk Management
The macro setup also favors Robinhood. Retail trading activity has resurged since late 2023, supported by a strong equity market and crypto revival. Average revenue per user has risen sharply, and volumes reflect increased participation. If the Federal Reserve cuts rates in the back half of 2025, it could ignite another leg of risk-on sentiment, supporting trading activity and asset prices.
Meanwhile, Robinhood continues to engage proactively with regulators. It’s registered as a broker-dealer, working closely with the CFTC on event contracts and aligning itself with EU crypto rules. These are signs of a maturing firm that intends to operate within the system rather than around it, despite its symbolic name. Regulatory risk remains, but it is far less existential than it once was.
Is Robinhood Stock a Good Buy?
On Wall Street, Robinhood holds a consensus Moderate Buy rating, based on 13 Buys, six Holds, and zero Sells. The average HOOD price target of $63.06 indicates a 53% upside in the next 12 months. This reaffirms that a valuation re-rating above $50 is likely for the stock in the near term. This will probably come to fruition in H2 2025 amid rate cuts and more apparent geopolitical outcomes from U.S. trade deals.
Bulls to Stay in Control of Robinhood Stock
Robinhood today is not Robinhood from 2021. It is no longer a one-dimensional brokerage looking for memes and poking the eyes of regulators. It’s an increasingly robust financial platform with multiple growth levers, high-margin products, and a strong balance sheet. While no longer dirt cheap, its valuation does not reflect the full earnings power or operating leverage that is now in place.
HOOD’s business is evolving in the right direction—toward scalability, durability, and engagement-based economics. The market still misunderstands the company, and that dislocation offers an opportunity. I’m bullish on Robinhood because I believe the next chapter is not just about trading. It’s about ownership of assets, attention, and the future of retail finance.