Robinhood (HOOD) AI Stock Analysis

• Market Cap: $80.85B
• Dividend Yield: N/A
• Average Volume (3M): 17.74M
• Price to Earnings (P/E): 36.1
• Beta (1Y): 3.12
• Revenue Growth: 73.48%
• EPS Growth: 315.24%
• Country: US
• Employees: 2,300
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 0.61
• Shares Outstanding: 786,356,000
• 10 Day Avg. Volume: 18,130,984
• 30 Day Avg. Volume: 17,735,917
• PEG Ratio: -0.06
• Price to Book (P/B): 4.12
• Price to Sales (P/S): 11.13
• P/FCF Ratio: -193.12
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 21.32
• Enterprise Value/Gross Profit: 25.20
• Enterprise Value/Ebitda: 42.97
• 1Y Price Target: $154.93
• Price Target Upside: 72.32% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): 2.56
• Revenue Forecast (FY): $5.63B

• Rating: 65 Neutral
• Price Target: $97.00 ▲(7.89% Upside)

The score is primarily supported by strong financial profitability/growth and a constructive earnings outlook with multiple growth drivers. It is held back by weak cash-flow quality signals and clear bearish technical momentum (below key moving averages with negative MACD), while valuation appears demanding at a 37.32 P/E without dividend support.

Positive Factors

High profitability & margins

High gross and net margins plus a strong ROE indicate a scalable, low-cost platform model. Durable profitability supports reinvestment in product and marketing, provides a cushion against volume cyclicality, and underpins long-term shareholder returns via efficient capital use.

Multiple revenue drivers & strong growth

Significant revenue growth driven by record equity/options volumes, expanding prediction markets and rising Gold subscribers shows successful monetization beyond PFOF. Diverse, repeatable revenue streams increase resilience and long-term ability to grow user lifetime value and ARPU.

International and institutional expansion

Growing funded accounts outside the U.S. and scaled Bitstamp volumes extend the addressable market and reduce US retail concentration. Product rollouts like UK ISA and institutional avenues create structural revenue diversification and durable runway for non-US growth.

Negative Factors

Weak cash conversion & FCF decline

Sharp FCF decline and very low OCF/net income imply earnings are not reliably converting to cash. This limits internal funding for capex, acquisitions, and product investment, increasing reliance on external financing and raising vulnerability in downturns.

Rising leverage

A higher debt-to-equity level signals greater financial leverage that reduces flexibility. In a rising-rate or volatile-volume environment, elevated interest costs and tighter covenants can constrain strategic choices and amplify downside during revenue slowdowns.

Higher operating costs & platform resilience risks

Rising OpEx and elevated share-based comp increase fixed cost base, while an AWS-related outage highlights infrastructure dependency. Together, they pressure margins and user trust; persistent reliability issues or cost inflation would hinder sustainable user growth and retention.

Robinhood 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 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 Financial Statement Overview

Summary

Strong profitability and growth (TTM revenue growth 17.86%, gross margin 86.66%, net margin 50.13%, ROE 22.92%) support a solid score, but rising leverage (debt-to-equity 1.57) and weak cash conversion/free cash flow growth (-59.46% FCF growth; operating cash flow to net income 0.11) meaningfully temper it.

Income Statement

Robinhood's income statement shows strong revenue growth with a TTM revenue growth rate of 17.86%. The company has impressive profitability metrics, with a gross profit margin of 86.66% and a net profit margin of 50.13% in the TTM period. The EBIT and EBITDA margins are also robust at 42.70% and 44.86%, respectively. These figures indicate a well-managed cost structure and efficient operations. However, the historical volatility in revenue growth and profitability, as seen in previous years, suggests potential risks in sustaining these high margins.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 1.57 in the TTM period, indicating a balanced approach to leveraging. The return on equity is healthy at 22.92%, showcasing effective use of equity capital. However, the equity ratio is not provided, which limits the analysis of asset financing. The increase in total debt over the years could pose a risk if not managed carefully, especially in volatile market conditions.

Cash Flow

The cash flow statement highlights a significant decline in free cash flow growth by 59.46% in the TTM period, which is a concern. The operating cash flow to net income ratio is low at 0.11, suggesting potential challenges in converting income into cash. However, the free cash flow to net income ratio is strong at 98.13%, indicating efficient cash generation relative to net income. The historical fluctuations in cash flow metrics suggest the need for improved cash management strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.20B	2.95B	1.86B	1.36B	1.81B	958.00M
Gross Profit	3.56B	2.45B	1.41B	770.00M	1.31B	721.00M
EBITDA	2.09B	1.13B	-460.00M	-905.00M	-1.61B	23.00M
Net Income	2.19B	1.41B	-541.00M	-1.03B	-3.69B	7.00M
Balance Sheet
Total Assets	41.45B	26.19B	17.62B	23.34B	19.77B	10.99B
Cash, Cash Equivalents and Short-Term Investments	14.61B	10.50B	8.44B	7.85B	8.09B	2.21B
Total Debt	15.67B	7.46B	3.55B	1.83B	3.65B	1.92B
Total Liabilities	32.88B	18.21B	10.93B	16.38B	12.48B	11.04B
Stockholders Equity	8.57B	7.97B	6.70B	6.96B	7.29B	-55.32M
Cash Flow
Free Cash Flow	1.12B	-170.00M	1.16B	-909.00M	-968.43M	1.84B
Operating Cash Flow	1.18B	-157.00M	1.18B	-852.00M	-884.77M	1.88B
Investing Cash Flow	733.00M	-148.00M	-582.00M	-60.00M	-237.88M	-32.33M
Financing Cash Flow	-886.00M	-345.00M	-610.00M	0.00	5.20B	1.28B

Robinhood Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 89.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 89.91 is below the 20-day moving average (MA) of 108.21, below the 50-day MA of 116.44, and below the 200-day MA of 104.46, indicating a bearish trend. The MACD of -6.85 indicates Positive momentum. The RSI at 20.80 is Positive, neither overbought nor oversold. The STOCH value of 7.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HOOD.

Robinhood Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	78 Outperform	$33.52B	33.91	20.41%	0.46%	11.88%	28.96%
SCHW	77 Outperform	$186.88B	22.62	18.11%	1.07%	5.90%	66.60%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SOFI	67 Neutral	$27.83B	57.11	5.66%	―	22.40%	215.81%
HOOD	65 Neutral	$80.85B	36.15	27.82%	―	73.48%	315.24%
COIN	65 Neutral	$50.66B	15.55	26.00%	―	47.86%	96.46%
BULL	52 Neutral	$3.41B	-5.94	―	―	―	―