Robinhood (HOOD) AI Stock Analysis

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Robinhood

(NASDAQ:HOOD)

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Outperform 77 (OpenAI - 4o)

Rating:77Outperform

Price Target:

$133.00

▲(9.21% Upside)

Robinhood's overall stock score of 77 reflects strong financial performance and positive earnings call highlights. The technical analysis indicates bullish momentum, but the high valuation and potential volatility are concerns. The company's strategic initiatives and product expansions are driving growth, but investors should be mindful of valuation and market volatility.

Positive Factors

Revenue Growth

Robinhood's strong revenue growth indicates effective business expansion and increased market penetration, supporting long-term financial stability.

Product Expansion

New product launches and international expansion enhance Robinhood's competitive position and diversify revenue streams, fostering sustainable growth.

S&P 500 Inclusion

Inclusion in the S&P 500 enhances Robinhood's visibility and credibility, potentially attracting more institutional investors and stabilizing its market position.

Negative Factors

Moderation in Net Deposits

A slowdown in net deposits may indicate challenges in sustaining customer acquisition momentum, impacting future growth prospects.

Crypto Monetization Challenges

Difficulties in monetizing crypto trading could limit revenue diversification and growth potential in the rapidly evolving digital asset market.

Debt Reliance

Increased reliance on debt could strain financial flexibility, posing risks to cash flow and limiting investment in growth opportunities.

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

Market Cap

$108.22B

Dividend YieldN/A

Average Volume (3M)43.85M

Price to Earnings (P/E)61.9

Beta (1Y)2.63

Revenue Growth58.58%

EPS Growth508.72%

CountryUS

Employees2,300

SectorFinancial

Sector Strength70

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)0.42

Shares Outstanding773,963,700

10 Day Avg. Volume49,413,932

30 Day Avg. Volume43,852,573

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 Cap0.89

Enterprise Value/Revenue27.12

Enterprise Value/Gross Profit31.29

Enterprise Value/Ebitda60.46

Forecast

1Y Price Target

$127.06

Price Target Upside4.34% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering18

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 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

Very 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

Positive

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 Price121.78

Price Trends

50DMA

110.60

Positive

100DMA

93.30

Positive

200DMA

69.22

Positive

Market Momentum

MACD

4.73

Negative

RSI

60.42

Neutral

STOCH

62.83

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 121.78 is above the 20-day moving average (MA) of 115.74, above the 50-day MA of 110.60, and above the 200-day MA of 69.22, indicating a bullish trend. The MACD of 4.73 indicates Negative momentum. The RSI at 60.42 is Neutral, neither overbought nor oversold. The STOCH value of 62.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
IBKR	78 Outperform	$29.44B	34.68	17.37%	0.75%	12.30%	20.76%
HOOD	77 Outperform	$108.22B	61.85	23.54%	―	58.58%	508.72%
SOFI	75 Outperform	$33.17B	56.43	8.19%	―	22.60%	―
SCHW	70 Outperform	$173.28B	25.70	12.28%	1.11%	4.64%	54.26%
COIN	68 Neutral	$80.32B	30.24	23.66%	―	57.56%	84.56%
BULL	51 Neutral	$7.50B	-13.46	-3.75%	―	―	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

* Financial Sector Average

Performance Comparison

HOOD

Robinhood

121.78

98.36

419.98%

IBKR

Interactive Brokers

66.12

31.47

90.82%

SCHW

Charles Schwab

95.46

31.47

49.18%

SOFI

SoFi

27.98

20.12

255.98%

COIN

Coinbase Global

312.59

134.42

75.44%

BULL

Webull Corporation

15.16

3.82

33.69%

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: Sep 09, 2025