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Robinhood (HOOD)
NASDAQ:HOOD
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Robinhood (HOOD) AI Stock Analysis

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HOOD

Robinhood

(NASDAQ:HOOD)

Rating:78Outperform
Price Target:
$118.00
▲(11.22%Upside)
Robinhood's stock is supported by strong earnings growth and positive technical momentum. Valuation concerns due to high P/E ratio and liquidity issues are the primary risks.
Positive Factors
Financial Performance
Robinhood has achieved positive GAAP profit in FY24 as guided, showcasing strong operating leverage with adjusted EBITDA margin growing 11ppt y/y to 51% in 1Q25.
Global Expansion
Robinhood launched tokenized equity trading to users across the EU, accelerating HOOD's 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.
Valuation Concerns
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 (HOOD) vs. SPDR S&P 500 ETF (SPY)

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 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 Key Performance Indicators (KPIs)

Any
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 (MAU) have shown volatility, with a notable decline from 2021 highs but a recent uptick in late 2024. Despite this fluctuation, the company's strong financial performance in 2024, with record revenue and market share gains, suggests strategic advancements are resonating with users. The introduction of innovative products like the Robinhood Legend platform and a new derivatives business may be driving renewed user engagement, positioning the company for continued growth in 2025 despite regulatory challenges.
Data provided by:Main Street Data

Robinhood Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q1-2025)
|
% Change Since: 0.00%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in revenue and product offerings, strong performance in Robinhood Gold, and expansion into international markets. Although there were some concerns related to costs from acquisitions and credit provisions, the overall business performance and strategic direction were positive.
Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Revenue increased by 50% year-over-year, with trading volumes up double-digits year-over-year and a record quarter for options trading. Robinhood saw net deposits of $18 billion in the quarter.
Expansion of Product Offerings
Launched futures and prediction markets with significant growth, and introduced new products like Robinhood Strategies, Cortex, and Banking. Futures saw over 4.5 million contracts traded in April, more than all of Q1.
Strong Growth in Robinhood Gold
Gold subscribers nearly doubled year-over-year to 3.2 million, with new customers adopting Gold at a 33% rate. Gold cardholders doubled to 200,000, and retirement assets increased by 20% to $16 billion.
International Expansion and Acquisitions
Acquisition of TradePMR brought over $40 billion of platform assets. International customers increased to over 150,000, and the Bitstamp acquisition is on track to close mid-year.
Financial Performance and Share Repurchase
EPS more than doubled, with adjusted EBITDA margins expanding. Over $650 million deployed in share repurchase, with plan increased to $1.5 billion.
Negative Updates
Costs from TradePMR Acquisition
Anticipated approximately $85 million of costs from TradePMR in 2025, impacting financial outlook.
Challenges with Credit Loss Provisions
Increase in provision for credit losses due to brokerage-related losses, impacting financials.
Company Guidance
In the recent earnings call, Robinhood provided extensive guidance, showcasing strong growth and promising developments across several key areas. Revenue surged by 50% year-over-year, with net deposits reaching a record $18 billion in Q1 2025. Trading volumes increased significantly, with options trading hitting a record high. The company also highlighted the successful launch of new products like Robinhood Strategies, which already boasts over 40,000 customers and $100 million in assets. Robinhood Gold subscribers nearly doubled, reaching 3.3 million, indicating a 12% adoption rate, while international customers climbed to over 150,000. The acquisition of TradePMR added $40 billion in platform assets, and retirement assets rose to $16 billion, marking a 20% increase since the start of the year. Additionally, the company is progressing with its Bitstamp acquisition, expected to close mid-year, and is planning a crypto event in France. This robust product velocity is driving strong business results, with adjusted EBITDA margins expanding by 11 points, demonstrating the effectiveness of Robinhood's strategic initiatives.

Robinhood Financial Statement Overview

Summary
Robinhood has shown significant improvements in revenue and profitability, overcoming past financial challenges. The balance sheet is solid, with a debt-free position, but recent negative cash flow trends raise concerns about liquidity.
Income Statement
75
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
68
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
60
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.95B1.86B1.36B1.81B958.00M
Gross Profit2.45B1.41B770.00M1.31B721.00M
EBITDA1.13B-460.00M-905.00M-1.61B23.00M
Net Income1.41B-541.00M-1.03B-3.69B7.00M
Balance Sheet
Total Assets26.19B17.62B23.34B19.77B10.99B
Cash, Cash Equivalents and Short-Term Investments10.50B8.44B7.85B8.09B2.21B
Total Debt7.46B3.55B1.83B3.65B1.92B
Total Liabilities18.21B10.93B16.38B12.48B8.86B
Stockholders Equity7.97B6.70B6.96B7.29B-55.32M
Cash Flow
Free Cash Flow-170.00M1.16B-909.00M-968.43M1.84B
Operating Cash Flow-157.00M1.18B-852.00M-884.77M1.88B
Investing Cash Flow-148.00M-582.00M-60.00M-237.88M-32.33M
Financing Cash Flow-345.00M-610.00M-1.82B5.20B1.28B

Robinhood Technical Analysis

Technical Analysis Sentiment
Positive
Last Price106.10
Price Trends
50DMA
84.60
Positive
100DMA
64.92
Positive
200DMA
52.67
Positive
Market Momentum
MACD
6.15
Positive
RSI
65.12
Neutral
STOCH
45.25
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 106.1 is above the 20-day moving average (MA) of 100.89, above the 50-day MA of 84.60, and above the 200-day MA of 52.67, indicating a bullish trend. The MACD of 6.15 indicates Positive momentum. The RSI at 65.12 is Neutral, neither overbought nor oversold. The STOCH value of 45.25 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$94.22B58.9723.54%58.74%1127.29%
76
Outperform
$28.31B207.0411.06%26.72%
75
Outperform
$23.51B23.2830.33%6.68%6.08%
75
Outperform
$49.55B19.0212.93%4.60%425.38%
69
Neutral
$69.12B-7.35%27.79%56.19%
63
Neutral
$34.93B5.90-12.00%2.00%5.61%-19.55%
61
Neutral
$21.78B-2.26%42.54%91.01%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HOOD
Robinhood
106.10
85.53
415.80%
CPAY
Corpay Inc
329.16
37.34
12.80%
XYZ
Block
77.59
15.71
25.39%
NET
Cloudflare
200.85
123.35
159.16%
AFRM
Affirm Holdings
67.43
39.14
138.35%
TOST
Toast Inc
48.61
22.45
85.82%

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: Jul 17, 2025