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Robinhood (HOOD)
NASDAQ:HOOD
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Robinhood
(NASDAQ:HOOD)
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Rating:64Neutral
Price Target:
$93.00
▲(22.26% Upside)
Action:ReiteratedDate:02/11/26
The score is driven primarily by improved financial performance (strong TTM profitability and free cash flow) and a constructive earnings-call outlook. This is materially offset by weak technicals (price below key moving averages with negative momentum) and a premium P/E valuation that raises execution risk if growth or engagement softens.
Positive Factors
High Profitability
Sustained, very high TTM margins indicate the business can convert revenue into earnings efficiently. This margin strength provides durable operating leverage, funds reinvestment and product expansion, and cushions the firm against revenue volatility over the next 2–6 months.
Strong Cash Generation
Consistent free cash flow near net income supports capital allocation flexibility, funding of growth initiatives and buffer for regulatory costs. Improved cash conversion and a ~43% FCF increase year‑over‑year signal sustainable internal funding for strategic investments.
Diversified Revenue Streams
Multiple >$100M revenue lines plus rapid Gold subscriber and card growth reduce reliance on any single product or market. Broadening revenue mix (payments, subscriptions, crypto, banking, prediction markets) improves resilience and creates multiple durable monetization levers.
Negative Factors
Top-line Weakness
A meaningful TTM revenue decline shows that recent profitability gains were driven more by margin expansion than consistent revenue growth. If revenue momentum stalls, ongoing investments and elevated expense guidance could pressure sustainable earnings progression.
Rising Leverage
Material increase in leverage raises financing and liquidity risk, reducing flexibility for opportunistic investments or absorbing shocks. Higher liabilities relative to equity could constrain strategic optionality if cash generation weakens or regulatory costs emerge.
Regulatory & Execution Risk
Key new offerings (prediction markets, tokenization/private markets) face regulatory, accreditation and market‑structure constraints that can delay monetization and raise compliance costs. Combined with sizable planned investment spending, this heightens execution risk over the medium term.
Robinhood (HOOD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$68.49B
Dividend YieldN/A
Average Volume (3M)32.40M
Price to Earnings (P/E)36.9
Beta (1Y)3.21
Revenue Growth73.48%
EPS Growth315.24%
CountryUS
Employees2,300
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)0.66
Shares Outstanding790,054,600
10 Day Avg. Volume26,797,474
30 Day Avg. Volume32,397,037
Financial Highlights & Ratios
PEG Ratio1.64
Price to Book (P/B)10.98
Price to Sales (P/S)22.47
P/FCF Ratio61.92
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue19.04
Enterprise Value/Gross Profit23.29
Enterprise Value/Ebitda38.83
Forecast
1Y Price Target
$125.92Price Target Upside65.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)2.4
Revenue Forecast (FY)$5.51B
Robinhood Business Overview & Revenue Model
Company DescriptionRobinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), options, gold, and cryptocurrencies. The company also offers various learning and education solutions comprise Snacks, a digest of business news stories; Learn, which is a collection of approximately articles, including guides, feature tutorials, and financial dictionary; Newsfeeds that offer access to free premium news from various sites, such as Barron's, Reuters, and The Wall Street Journal; lists and alerts, which allow users to create custom watchlists and alerts to monitor securities, ETFs, and cryptocurrencies, as well as cash management services; and offers First trade recommendations to all new customers who have yet to place a trade. Robinhood Markets, Inc. was incorporated in 2013 and is headquartered in Menlo Park, California.
How the Company Makes MoneyRobinhood generates revenue primarily through a business model known as payment for order flow (PFOF), where it receives compensation from market makers for directing trades to them. This practice allows Robinhood to offer commission-free trading to its users. Additionally, the company earns revenue from subscription services, such as Robinhood Gold, which offers premium features like margin trading and access to professional research. Other revenue streams include interest on cash balances, fees from margin lending, and fees associated with cryptocurrency transactions. Partnerships with various financial institutions and market makers further enhance its earnings potential.
Robinhood Key Performance Indicators (KPIs)
Any
Gold Subscribers
Counts the number of users subscribed to Robinhood Gold, reflecting the uptake of premium services and potential for higher revenue per user.
Counts the number of users subscribed to Robinhood Gold, reflecting the uptake of premium services and potential for higher revenue per user.
Data provided by:
The Fly
The FlyRobinhood Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: large double‑digit revenue growth (52% YoY), record adjusted EBITDA and margins, major increases in platform assets and deposits, clear product traction across prediction markets, shorting, banking, Gold subscriptions and Bitstamp, and meaningful AI‑driven efficiencies. These positives are tempered by share price weakness, some retail volume softness and mix variability (crypto/retail), and regulatory/operational hurdles for ambitious new offerings (prediction markets tied to company metrics, U.S. tokenization/private markets). On balance the company presented more and larger material achievements than risks, while acknowledging and underwriting regulatory and investment risks.Q4-2025 Updates
Positive Updates
Record Revenue and Profitability
Full-year 2025 revenue of $4.5B, up 52% year‑over‑year; adjusted EBITDA of $2.5B, up 76% YoY; adjusted EBITDA margin reached a record 56%; record EPS of $2.05.
Strong Q4 Results
Q4 revenue of $1.3B, up 27% YoY; Q4 net deposits of $16B (eighth straight quarter >$10B); Q4 adjusted opex plus SBC was $597M, approximately $15M below outlook.
Robust Asset and Deposit Growth
Total platform assets grew nearly 70% YoY to $324B; record net deposits of $68B for 2025 (cited as a ~35% growth rate); Q1 2026 net deposits off to a strong start with $7B+ so far.
User Engagement and Product Adoption
Robinhood Gold subscribers grew nearly 60% YoY to 4.2M; Robinhood Gold Card customers grew over 5x in 2025 to ~600k and the card reached >$10B in annualized spend with plans to more than double cardholders to >1M in 2026.
Prediction Markets & New Product Momentum
Prediction markets volume doubled, with >12B contracts traded in 2025 and a stated $300M+ run rate in first year; customers have traded >4B contracts so far in 2026; equities shorting launched with >$11B equity notional traded in initial months.
International Expansion and Exchange Scaling
Bitstamp volumes doubled since the June close and are scaling; three‑quarters of a million customers outside the U.S.; launched ISAs in the UK and delivered ~2,000 stock tokens in Europe as tokenization progress.
Diversified Revenue Streams
Company reports 11 businesses with >$100M in annualized revenue; multiple scaling lines (TradePMR, futures, index options, banking, card) and revenues up over threefold in three years.
AI-driven Efficiency and CX Improvements
AI solves >75% of customer service cases (including complex cases); internal AI/software engineering automation drove 'nine‑figure' estimated savings in 2025; Cortex Assistant and Cortex for Legend being rolled out.
Early Traction for Robinhood Banking
Initial banking rollout: >25k funded customers with >$400M in balances and >50% of funded customers enrolled in direct deposit; competitive savings/checking APY (noted 3.5% APY) and strong early direct-deposit attach.
Negative Updates
Share Price Weakness
Management and shareholders noted a more than 40% decline in Robinhood's share price; leadership stressed focus on business inputs rather than short‑term stock moves.
Retail Volume Softness and Take‑Rate Pressure
Retail/ casual trader activity declined into Q4 relative to Q3, lowering overall take rates; management noted January rebate rate was ~5 basis points lower than Q4 average as engagement shifted toward more active traders.
Regulatory and Structural Hurdles for New Offerings
Expansion of prediction markets into company KPI/earnings‑linked contracts may require regulatory relief (possible SEC implications); private markets/tokenization in the U.S. face accreditation and crypto market‑structure challenges that could slow rollouts.
Crypto Market Volatility and Mix Shifts
Crypto revenue represented ~18% of 2025 revenue, exposing the company to crypto volatility; Bitstamp saw institutional volume pickup while some retail crypto volumes declined versus prior quarter, indicating mix variability.
Increased Investment and Expense Load
2026 adjusted OPEX + SBC guidance of $2.6–2.725B implies ~18% YoY expense growth at the midpoint; roughly 10 percentage points of the planned expense growth is allocated to new/scaling businesses (risk if investments take longer to return ROI).
Competition and Marketing Requirements
Prediction markets and other new products face competitive entrants and aggressive advertising; management continues to rely on promotions (noted ~25% last year) and ROI‑driven marketing which may need to stay elevated to sustain top‑of‑funnel growth.
Company Guidance
Guidance for 2026 centers on accelerating product velocity while delivering “another year of profitable growth”: adjusted OPEX + SBC are guided to $2.60–$2.725 billion (midpoint ≈18% YoY expense growth, ~5ppt into existing businesses, ~3ppt from full‑year effect of Bitstamp & TradePMR, ~10ppt into new/scaling businesses), a target of 20%+ net deposit growth, plans to more than double Robinhood Gold Card customers to well over 1 million (card: ~600k in 2025) and continue expanding Gold subscribers (4.2M, +~60% YoY), and continued ROI underwriting for new investments; management pointed to strong early‑year momentum—January volumes +50% YoY (options +20%), Q1 net deposits >$7B (including >$2B last week), and February ADTVs up vs. January—building on 2025 results (revenues $4.5B, +52% YoY; adjusted EBITDA $2.5B, +76%, margin 56%; EPS $2.05; total platform assets $324B, +~70% YoY; net deposits $68B; Q4 revenue $1.3B, +27%; Q4 net deposits $16B; interest‑earning assets +39%; margin +100% YoY), plus product KPIs (prediction markets: >12B contracts in 2025, $300M+ run rate, >4B traded in 2026 so far; >25k funded banking customers with >$400M balances and >50% direct‑deposit attach; Bitstamp volumes ~2x since close; >750k international customers; 2,000 stock tokens in Europe; 11 businesses >$100M ARR; AI resolving >75% of support cases and engineering efficiencies in the nine‑figure range in 2025).Robinhood Financial Statement Overview
Summary
Strong TTM turnaround with very high net (~52%) and EBIT (~48%) margins and solid free cash flow (~$1.60B; ~95% of net income), but tempered by a TTM revenue decline (~14%), higher leverage (debt-to-equity ~1.83 vs ~0.94 in 2024), and prior-year cash flow volatility.Income Statement
Profitability has strengthened materially, culminating in TTM (Trailing-Twelve-Months) net margin of ~52% and EBIT margin of ~48%, a major improvement versus the losses posted in 2021–2023. Gross margin remains very strong (TTM ~85%). The key concern is top-line momentum: TTM revenue declined ~14% despite the big earnings step-up, suggesting results are currently more dependent on margin/operating leverage than consistent revenue expansion.78
Positive
Balance Sheet
Equity is sizable (TTM ~$9.2B) and returns have improved (TTM return on equity ~27%), consistent with the shift to strong profitability. However, leverage signals are mixed: debt-to-equity rises to ~1.83 in TTM from ~0.94 in 2024, implying a higher reliance on liabilities relative to equity versus last year. Total assets have also expanded to ~$38.1B in TTM, which can support scale, but the higher leverage trajectory is the primary balance-sheet watch item.66
Positive
Cash Flow
Cash generation improved meaningfully in TTM, with operating cash flow of ~$1.64B and free cash flow of ~$1.60B, and free cash flow up ~43%. Free cash flow tracks net income reasonably well (TTM free cash flow is ~95% of net income), supporting earnings quality. The main drawback is volatility: 2024 showed negative operating and free cash flow, highlighting that cash conversion can swing year-to-year.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.47B | 2.95B | 1.86B | 1.36B | 1.81B |
| Gross Profit | 3.28B | 2.45B | 1.41B | 770.00M | 1.31B |
| EBITDA | 2.19B | 1.13B | -460.00M | -905.00M | -1.61B |
| Net Income | 1.88B | 1.41B | -541.00M | -1.03B | -3.69B |
Balance Sheet | |||||
| Total Assets | 38.14B | 26.19B | 17.62B | 23.34B | 19.77B |
| Cash, Cash Equivalents and Short-Term Investments | 8.04B | 10.50B | 8.44B | 7.85B | 8.09B |
| Total Debt | 15.41B | 7.46B | 3.55B | 1.83B | 3.65B |
| Total Liabilities | 28.99B | 18.21B | 10.93B | 16.38B | 12.48B |
| Stockholders Equity | 9.15B | 7.97B | 6.70B | 6.96B | 7.29B |
Cash Flow | |||||
| Free Cash Flow | 1.62B | -170.00M | 1.16B | -909.00M | -968.43M |
| Operating Cash Flow | 1.64B | -157.00M | 1.18B | -852.00M | -884.77M |
| Investing Cash Flow | 141.00M | -148.00M | -582.00M | -60.00M | -237.88M |
| Financing Cash Flow | -590.00M | -345.00M | -610.00M | 0.00 | 5.20B |
Robinhood Technical Analysis
Negative
76.07
Price Trends
98.74
Negative
114.72
Negative
107.08
Negative
Market Momentum
-6.41
Negative
39.59
Neutral
74.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOOD, the sentiment is Negative. The current price of 76.07 is below the 20-day moving average (MA) of 77.78, below the 50-day MA of 98.74, and below the 200-day MA of 107.08, indicating a bearish trend. The MACD of -6.41 indicates Negative momentum. The RSI at 39.59 is Neutral, neither overbought nor oversold. The STOCH value of 74.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $30.91B | 31.30 | 20.41% | 0.46% | 11.88% | 28.96% | |
69 Neutral | $166.88B | 20.47 | 18.10% | 1.07% | 5.90% | 66.60% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $68.49B | 36.94 | 22.01% | ― | 73.48% | 315.24% | |
63 Neutral | $23.73B | 48.97 | 5.66% | ― | 22.40% | 215.81% | |
61 Neutral | $48.16B | 41.54 | 10.05% | ― | 47.86% | 96.46% | |
52 Neutral | $2.99B | -5.29 | ― | ― | ― | ― |
* Financial Sector Average
HOOD
Robinhood
76.07
27.95
58.08%
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SCHW
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COIN
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BULL
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5.96
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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.