Robinhood Markets (HOOD) AI Stock Analysis

• Market Cap: $80.54B
• Dividend Yield: N/A
• Average Volume (3M): 44.59M
• Price to Earnings (P/E): 54.0
• Beta (1Y): 2.65
• Revenue Growth: 58.74%
• EPS Growth: 1127.29%
• Country: US
• Employees: 2,300
• Sector: Technology
• Sector Strength: 89
• Industry: Software - Infrastructure
• EPS (TTM): 0.37
• Shares Outstanding: 767,047,000
• 10 Day Avg. Volume: 60,293,761
• 30 Day Avg. Volume: 44,592,497
• PEG Ratio: 0.10
• Price to Book (P/B): 1.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -7.87
• Enterprise Value/Market Cap: 0.05
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 1.74
• Enterprise Value/Ebitda: 1.09
• 1Y Price Target: $79.85
• Price Target Upside: -15.54% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 72 Outperform
• Price Target: $104.00 ▲(10.01%Upside)

Robinhood's strong financial recovery and bullish technical indicators are the main drivers of its stock score. However, high valuation and recent liquidity concerns slightly offset these positives. The positive earnings call highlights robust growth and strategic execution, further supporting the score.

Positive Factors

Financial Performance

Robinhood's ability to diversify and cross-sell is supported by Gold subscribers, retirement accounts gaining traction, and multiple new products to support ARPU.

Global Expansion

Robinhood launched tokenized equity trading to users across the EU, accelerating its 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

Market Uncertainty

There is a possible slowdown ahead amidst heightened uncertainty.

Market Valuation

HOOD is valued at a 15x FY27E revenue multiple, which is ahead of the FinTech growth peer group, and this premium is considered merited.

Robinhood Markets Business Overview & Revenue Model

Company Description

Robinhood 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 Money

Robinhood primarily generates revenue through a practice known as payment for order flow, where it receives compensation from market makers for directing customer trade orders to them. This allows Robinhood to offer commission-free trading to its users. Additionally, the company earns interest on the uninvested cash that users hold in their accounts and charges for its premium subscription service, Robinhood Gold, which provides enhanced features such as margin trading and access to professional research reports. Robinhood also benefits from its cash management services by earning interest on customer deposits. The company has partnerships with financial institutions to facilitate these services, contributing to its earnings.

Robinhood Markets Financial Statement Overview

Summary

Robinhood exhibits significant improvements in revenue and profitability, with a strong gross profit margin and positive net profit margin TTM. The balance sheet is debt-free, enhancing financial stability. However, cash flow management needs attention due to recent negative trends, indicating liquidity concerns.

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	3.26B	2.95B	1.89B	1.38B	1.84B	958.83M
Gross Profit	2.18B	2.60B	1.71B	1.17B	1.35B	484.28M
EBITDA	1.35B	1.13B	-442.00M	-881.00M	-3.64B	23.72M
Net Income	1.59B	1.41B	-541.00M	-1.03B	-3.69B	2.85M
Balance Sheet
Total Assets	27.52B	26.19B	17.62B	23.34B	19.77B	10.99B
Cash, Cash Equivalents and Short-Term Investments	4.42B	10.50B	8.44B	7.85B	8.09B	2.21B
Total Debt	0.00	7.46B	3.55B	1.83B	3.65B	1.92B
Total Liabilities	19.56B	18.21B	10.93B	16.38B	12.48B	8.86B
Stockholders Equity	7.95B	7.97B	6.70B	6.96B	7.29B	-55.32M
Cash Flow
Free Cash Flow	1.06B	-170.00M	1.16B	-909.00M	-968.43M	1.84B
Operating Cash Flow	1.11B	-157.00M	1.18B	-852.00M	-884.77M	1.88B
Investing Cash Flow	-92.00M	-148.00M	-582.00M	-60.00M	-237.88M	-32.33M
Financing Cash Flow	-732.00M	-345.00M	-610.00M	-1.82B	5.20B	1.28B

Robinhood Markets Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 94.54 is above the 20-day moving average (MA) of 83.43, above the 50-day MA of 69.71, and above the 200-day MA of 46.68, indicating a bullish trend. The MACD of 7.36 indicates Negative momentum. The RSI at 69.23 is Neutral, neither overbought nor oversold. The STOCH value of 61.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HOOD.

Robinhood Markets Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPAY	77 Outperform	$23.41B	23.29	30.33%	―	6.68%	6.08%
TOST	76 Outperform	$25.19B	190.36	11.06%	―	26.72%	―
XYZ	75 Outperform	$41.72B	16.79	12.93%	―	4.60%	425.38%
HOOD	72 Outperform	$80.54B	53.96	21.43%	―	58.74%	1127.29%
NET	69 Neutral	$66.83B	―	-7.35%	―	27.79%	56.19%
AFRM	61 Neutral	$21.85B	―	-2.26%	―	42.54%	91.01%
Sector *	56 Neutral	HK$14.03B	5.19	-5.75%	5.41%	9.34%	-42.23%

Robinhood Markets 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.