Robinhood (HOOD) AI Stock Analysis

• Market Cap: $101.46B
• Dividend Yield: N/A
• Average Volume (3M): 44.52M
• Price to Earnings (P/E): 58.4
• Beta (1Y): 2.61
• Revenue Growth: 58.58%
• EPS Growth: 508.72%
• Country: US
• Employees: 2,300
• Sector: Financial
• Sector Strength: 69
• Industry: Software - Infrastructure
• EPS (TTM): 0.42
• Shares Outstanding: 773,963,700
• 10 Day Avg. Volume: 38,939,284
• 30 Day Avg. Volume: 44,517,813
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 27.12
• Enterprise Value/Gross Profit: 31.29
• Enterprise Value/Ebitda: 60.46
• 1Y Price Target: $111.00
• Price Target Upside: -3.50% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 78 Outperform
• Price Target: $124.00 ▲(7.81% Upside)

Robinhood's strong earnings call performance and robust financial metrics are the most significant factors driving the stock score. The company's positive momentum in trading volumes and international expansion, coupled with effective cost management, contribute to a favorable outlook. However, high valuation and potential overbought technical indicators slightly temper the overall score.

Positive Factors

Earnings

The company's revenues and adjusted EBITDA exceeded both internal and consensus estimates.

Global Expansion

Robinhood launched tokenized equity trading to users across the EU, accelerating HOOD's global expansion by leveraging the EU's MiCA framework.

Innovation

The introduction of tokenized U.S. equities for Robinhood users in the EU and expanded crypto trading coverage reinforce first-rate innovation and TAM expansion for the Company.

Negative Factors

Growth Potential

While HOOD continues to see solid momentum across the platform, the stock is pricing in much of the growth potential in our view.

Net Deposit Growth

Net deposit growth was in the mid-teens, below management's target of 20%.

Stock Valuation

While long-term prospects are bullish, there is more limited upside to shares at current levels.

Robinhood Business Overview & Revenue Model

Company Description

Robinhood is a financial technology company that operates a commission-free trading platform for stocks, options, ETFs, and cryptocurrencies. Founded in 2013, the company aims to democratize finance for all by providing a user-friendly mobile app that allows individuals to invest without traditional brokerage fees. Robinhood primarily targets younger investors and offers additional features such as cash management accounts and educational resources, enhancing its appeal in the growing fintech sector.

How the Company Makes Money

Robinhood generates revenue through several key streams, primarily including payment for order flow (PFOF), interest on cash balances, and subscription services. Payment for order flow involves routing customer orders to market makers and receiving a fee for executing those trades, which is a significant portion of its earnings. Additionally, Robinhood earns interest on uninvested cash in customer accounts and from its margin lending services. The company also offers a premium subscription service called Robinhood Gold, which provides users with advanced trading features and research tools for a monthly fee. Strategic partnerships with various financial institutions and technology providers further enhance its service offerings and contribute to its revenue.

Robinhood Financial Statement Overview

Summary

Robinhood demonstrates strong revenue growth and improved profitability, with a notable turnaround in net profit margin and positive EBIT and EBITDA margins. The balance sheet is debt-free, enhancing stability, but liquidity concerns arise from negative operating and free cash flows.

Income Statement

Robinhood's revenue showed strong growth with a 19.2% increase TTM, driven by a robust gross profit margin of 94%. The net profit margin also improved significantly from a negative position to 62.7% TTM, reflecting enhanced profitability. Despite past EBIT and EBITDA losses, TTM margins turned positive to 15.7% and 25.4%, respectively, indicating operational improvements. However, the historical volatility in earnings remains a concern.

Balance Sheet

The balance sheet is solid with a debt-free position in the latest period, substantially improving the debt-to-equity ratio. The return on equity has shifted from negative to 17.7% TTM, showing better use of shareholder funds. The equity ratio stands at 30.4%, reflecting a balanced capital structure. However, the declining asset base and past leverage trends pose potential risks.

Cash Flow

Cash flows show mixed trends, with operating cash flow turning negative TTM, raising concerns about liquidity management. The free cash flow, also negative, reflects pressure on cash reserves. Despite this, past periods demonstrated strong cash flow generation, which may help stabilize future operations. The cash flow to net income ratio is negative, indicating a need for improved cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.57B	2.95B	1.86B	1.36B	1.81B	958.00M
Gross Profit	3.09B	2.45B	1.41B	770.00M	1.31B	721.00M
EBITDA	1.60B	1.13B	-460.00M	-905.00M	-1.61B	23.00M
Net Income	1.79B	1.41B	-541.00M	-1.03B	-3.69B	7.00M
Balance Sheet
Total Assets	35.32B	26.19B	17.62B	23.34B	19.77B	10.99B
Cash, Cash Equivalents and Short-Term Investments	13.54B	10.50B	8.44B	7.85B	8.09B	2.21B
Total Debt	12.64B	7.46B	3.55B	1.83B	3.65B	1.92B
Total Liabilities	27.25B	18.21B	10.93B	16.38B	12.48B	11.04B
Stockholders Equity	8.07B	7.97B	6.70B	6.96B	7.29B	-55.32M
Cash Flow
Free Cash Flow	2.83B	-170.00M	1.16B	-909.00M	-968.43M	1.84B
Operating Cash Flow	2.88B	-157.00M	1.18B	-852.00M	-884.77M	1.88B
Investing Cash Flow	-2.17B	-148.00M	-582.00M	-60.00M	-237.88M	-32.33M
Financing Cash Flow	2.55B	-345.00M	-610.00M	0.00	5.20B	1.28B

Robinhood Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 115.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOOD, the sentiment is Positive. The current price of 115.02 is above the 20-day moving average (MA) of 107.75, above the 50-day MA of 96.37, and above the 200-day MA of 58.44, indicating a neutral trend. The MACD of 4.46 indicates Positive momentum. The RSI at 52.97 is Neutral, neither overbought nor oversold. The STOCH value of 57.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HOOD.

Robinhood Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPAY	79 Outperform	$22.43B	21.51	31.43%	―	9.22%	6.60%
HOOD	78 Outperform	$101.46B	58.42	23.54%	―	58.58%	508.72%
XYZ	73 Outperform	$46.21B	16.41	14.27%	―	1.41%	262.31%
NET	70 Neutral	$70.01B	―	-11.04%	―	27.32%	-11.94%
TOST	69 Neutral	$25.16B	123.94	14.51%	―	26.11%	―
Sector *	68 Neutral	$17.56B	11.63	10.45%	3.85%	9.69%	1.92%
AFRM	61 Neutral	$25.40B	―	-2.26%	―	42.54%	91.01%

Robinhood Corporate Events

Robinhood Markets Releases Q4 2024 Order Routing Reports

Robinhood Markets released its SEC Rule 606(a) order routing reports for the fourth quarter of 2024, detailing the payment for order flow and routing practices of its broker-dealer subsidiaries. These reports highlight the revenue-sharing agreements between Robinhood Financial LLC and Robinhood Securities, LLC, and provide insights into the routing of non-directed orders to various market centers, but do not reflect consolidated company results.