Robinhood (HOOD) AI Stock Analysis

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Robinhood

(NASDAQ:HOOD)

Rating:78Outperform

Price Target:

$124.00

▲(22.47% 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

Financial Performance

Strong top and bottom-line earnings beat masks deceleration in KPIs, indicating solid financial performance.

Product Innovation

Robinhood launched tokenized equity trading to users across the EU, accelerating global expansion.

Revenue Growth

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

Negative Factors

Growth Targets

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

Market Pricing

The stock is pricing in much of the growth potential according to some analysts' views.

Stock Valuation

There is more limited upside to shares at current levels despite bullish long-term prospects.

Robinhood (HOOD) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$89.98B

Dividend YieldN/A

Average Volume (3M)39.22M

Price to Earnings (P/E)51.4

Beta (1Y)2.63

Revenue Growth58.58%

EPS Growth508.72%

CountryUS

Employees2,300

SectorFinancial

Sector Strength70

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.42

Shares Outstanding773,963,700

10 Day Avg. Volume33,921,623

30 Day Avg. Volume39,217,291

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.08

Enterprise Value/Revenue27.12

Enterprise Value/Gross Profit31.29

Enterprise Value/Ebitda60.46

Forecast

1Y Price Target

$113.71

Price Target Upside12.31% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering19

Robinhood Business Overview & Revenue Model

Company DescriptionRobinhood 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 MoneyRobinhood 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 Key Performance Indicators (KPIs)

Any

Monthly Active Users

Monthly Active Users
Measures the number of users engaging with Robinhood's platform each month, indicating customer retention, platform popularity, and potential for monetization.

Chart InsightsRobinhood's monthly active users have experienced fluctuations, with a notable decline from 2021 highs. However, a recent uptick in Q1 2025 aligns with the company's robust growth in revenue and product offerings, as highlighted in their earnings call. The surge in trading volumes and new product launches, such as Robinhood Strategies, are likely driving user engagement. Despite challenges from acquisition costs and credit provisions, the strategic initiatives and international expansion are fostering a positive outlook for user growth and overall business performance.

Data provided by:

Main Street Data

Robinhood Earnings Call Summary

Earnings Call Date:Jul 30, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 29, 2025

Earnings Call Sentiment Positive

Robinhood demonstrated strong growth in Q2 2025 with record trading volumes, significant asset growth, and an increase in international customers. The launch of new products and expansion of Robinhood Gold subscribers indicate positive momentum. However, the moderation in net deposits and ongoing challenges in crypto monetization present areas to watch. Overall, the highlights significantly outweigh the lowlights, suggesting a positive outlook.

Q2-2025 Updates

Positive Updates

Record Trading Volumes

Record trading volumes in Q2 across equities, options, prediction markets, index options, and futures. Index options volumes grew 60% from Q1, and event contracts more than doubled to nearly 1 billion in Q2.

Assets Under Management Growth

Customers' assets have doubled year-over-year to more than $0.25 trillion. Average assets per funded customer were over $10,000 for the first time, nearly doubling from a year ago.

Significant Revenue Growth

Revenue is up 45% year-over-year to nearly $1 billion. The company achieved the third-highest quarter of net deposits ever, with six consecutive quarters of over $10 billion in net deposits.

Expansion of International Customer Base

Robinhood now has over 600,000 international customers with the integration of Bitstamp. The European offering has expanded to 30 countries, serving over 400 million people.

Growth in Robinhood Gold Subscribers

Gold subscribers increased to 3.5 million, up over 75% year-over-year, with a 13% adoption rate among the overall customer base and over 35% adoption among new customers.

Successful Launch of New Products

Robinhood Strategies has grown to over 100,000 funded customers, and retirement assets have more than doubled to over $20 billion. The company also launched the Gold Card, Cortex, and plans to introduce Robinhood Banking soon.

Negative Updates

Moderation in Net Deposit Momentum

There was a moderation in net deposits in Q2, attributed to adjustments in promotional activity. However, net deposits re-accelerated in July.

Challenges in Crypto Monetization

While there is growth in crypto trading volumes, the company is still experimenting with pricing strategies to optimize revenue per trader.

Company Guidance

During Robinhood's Q2 2025 earnings call, the company provided a comprehensive overview of its strong performance across various metrics. Revenue surged by 45% year-over-year, reaching nearly $1 billion, while the company reported an 81% incremental adjusted EBITDA margin and doubled its EPS compared to the previous year. Trading volumes set new records across equities, options, prediction markets, index options, and futures, with index options volumes growing 60% from Q1 and event contracts nearly doubling to almost 1 billion in Q2. The average assets per funded customer surpassed $10,000 for the first time, doubling from the previous year, and total assets under custody increased to more than $0.25 trillion. Robinhood also expanded its Gold subscribers to 3.5 million, representing a 13% adoption rate among its customer base, and noted that net deposits remained strong with July exceeding previous records, putting the company on track to surpass last year's $50 billion in net deposits. The company highlighted its continued product innovation, including the upcoming launch of Robinhood Banking, and expansion into international markets, notably through the tokenization of stocks, staking, and the completion of the Bitstamp acquisition.

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

Positive

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

Positive

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

Neutral

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

Neutral

Last Price101.25

Price Trends

50DMA

103.11

Negative

100DMA

82.10

Positive

200DMA

62.98

Positive

Market Momentum

MACD

-0.39

Positive

RSI

44.58

Neutral

STOCH

32.04

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOOD, the sentiment is Neutral. The current price of 101.25 is below the 20-day moving average (MA) of 107.63, below the 50-day MA of 103.11, and above the 200-day MA of 62.98, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 44.58 is Neutral, neither overbought nor oversold. The STOCH value of 32.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HOOD.

Robinhood Risk Analysis

Robinhood disclosed 65 risk factors in its most recent earnings report. Robinhood reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Robinhood Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HOOD	78 Outperform	$89.98B	51.43	23.54%	―	58.58%	508.72%
IBKR	78 Outperform	$26.79B	31.55	19.15%	0.83%	12.30%	20.76%
SCHW	74 Outperform	$167.09B	24.78	15.59%	1.15%	4.64%	54.26%
SOFI	72 Outperform	$30.35B	51.63	8.80%	―	22.60%	―
Sector *	68 Neutral	$17.80B	11.87	10.23%	3.74%	9.69%	1.18%
COIN	68 Neutral	$76.84B	28.93	27.96%	―	57.56%	84.56%
BULL	51 Neutral	$6.27B	93.34	-3.09%	―	―	―

* Financial Sector Average

Performance Comparison

HOOD

Robinhood

101.25

81.59

415.01%

IBKR

Interactive Brokers

61.11

30.22

97.83%

SCHW

Charles Schwab

92.05

29.84

47.97%

SOFI

SoFi

25.60

18.52

261.58%

COIN

Coinbase Global

299.07

144.02

92.89%

BULL

Webull Corporation

13.39

2.12

18.81%

Robinhood Corporate Events

Regulatory Filings and Compliance

Robinhood Markets Releases Q4 2024 Order Routing Reports

Neutral

Jan 31, 2025

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.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025