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Robinhood Markets (HOOD)
NASDAQ:HOOD
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Robinhood Markets
(NASDAQ:HOOD)
74Outperform
Positive Factors
Customer Growth
Customer acquisition & new assets' momentum: HOOD added another 600K funded accounts sequentially to 25.8mn accounts, with Gold subscribers growing from 2.64mn to 3.19mn.
Financial Performance
HOOD again crushed the quarter, with total revenues growing 50% YoY and Q1 EPS at $0.38 up ~110% YoY.
Strategic Growth
Robinhood attracted a record $18bn in net new deposits this quarter, indicating strong organic growth and strategic successes.
Negative Factors
Crypto Performance
Crypto volumes softened, reflecting weaker performance in this segment.
Interest Revenue
Net interest revenue fell short of expectations, marking the first sequential decline since slower securities lending despite peak rates.
Operating Expenses
Higher marketing spend led to operating expenses being higher than expected.
Robinhood Markets (HOOD) vs. S&P 500 (SPY)
Market Cap
$50.68B
Dividend YieldN/A
Average Volume (3M)48.85M
Price to Earnings (P/E)32.8
Beta (1Y)2.69
Revenue Growth58.74%
EPS Growth1127.29%
CountryUS
Employees2,300
SectorTechnology
Sector Strength65
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.37
Shares Outstanding767,047,000
10 Day Avg. Volume46,167,407
30 Day Avg. Volume48,847,048
Financial Highlights & Ratios
PEG Ratio2.43
Price to Book (P/B)6.08
Price to Sales (P/S)0.00
P/FCF Ratio45.28
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue4.03
Enterprise Value/Gross Profit20.12
Enterprise Value/Ebitda12.62
Forecast
1Y Price Target
$61.39Price Target Upside6.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
Robinhood Markets Business Overview & Revenue Model
Company DescriptionRobinhood Markets, Inc. is a financial services company headquartered in Menlo Park, California. It operates in the financial technology (fintech) sector, offering commission-free trading of stocks, ETFs, options, and cryptocurrencies via a mobile app and website. The company aims to democratize finance by making investing accessible to a broader audience, particularly attracting younger, tech-savvy investors. Robinhood's platform also provides educational resources and tools to help users make informed investment decisions.
How the Company Makes MoneyRobinhood primarily generates revenue through a practice known as payment for order flow, where it receives payments from market makers in exchange for routing users' trades to them. Additionally, Robinhood earns interest income from users' cash deposits and margin balances. The company also offers a premium subscription service called Robinhood Gold, which provides users with enhanced features such as research reports, larger instant deposits, and access to margin trading for a monthly fee. Another revenue source is the interest earned on securities lending, where Robinhood lends shares held in users' accounts to other financial institutions. Partnerships and other financial activities may also contribute to its earnings, though these are less significant compared to its primary revenue streams.
Robinhood Markets Key Performance Indicators (KPIs)
Any
Monthly Active Users
Tracks the number of users engaging with the platform each month, indicating user retention and overall platform popularity.
Tracks the number of users engaging with the platform each month, indicating user retention and overall platform popularity.
Data provided by:
Main Street Data
Main Street DataRobinhood Markets Financial Statement Overview
Summary
Robinhood Markets demonstrates significant improvements in revenue and profitability, overcoming past financial challenges. The balance sheet is strengthened by eliminating debt, but cash flow management needs attention due to recent negative trends. Overall, the company shows promising recovery indicators, but vigilance is necessary to maintain momentum and address 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.75
Positive
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.68
Positive
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.60
Neutral
| 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 | EBIT |
| 1.27B | 1.05B | -513.00M | -942.00M | -3.67B | 13.78M | EBITDA |
| 1.35B | 1.13B | -442.00M | -881.00M | -3.64B | 23.72M | Net Income Common Stockholders |
| 1.59B | 1.41B | -541.00M | -1.03B | -3.69B | 2.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 10.50B | 10.50B | 4.83B | 7.34B | 8.13B | 1.40B | Total Assets |
| 26.19B | 26.19B | 32.33B | 23.34B | 19.77B | 10.99B | Total Debt |
| 7.46B | 7.46B | 3.55B | 2.98B | 5.64B | 1.98B | Net Debt |
| 3.13B | 3.13B | -1.29B | -3.36B | -617.55M | 572.59M | Total Liabilities |
| 18.21B | 18.21B | 25.64B | 16.38B | 12.48B | 8.86B | Stockholders Equity |
| 7.97B | 7.97B | 6.70B | 6.96B | 7.29B | 2.12B |
| 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
Positive
57.43
Price Trends
44.03
Positive
45.85
Positive
35.91
Positive
Market Momentum
2.94
Negative
70.91
Negative
87.47
Negative
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 57.43 is above the 20-day moving average (MA) of 47.49, above the 50-day MA of 44.03, and above the 200-day MA of 35.91, indicating a bullish trend. The MACD of 2.94 indicates Negative momentum. The RSI at 70.91 is Negative, neither overbought nor oversold. The STOCH value of 87.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HOOD.
Robinhood Markets Risk Analysis
Robinhood Markets disclosed 65 risk factors in its most recent earnings report. Robinhood Markets 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 Markets Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $24.77B | 182.81 | 11.06% | ― | 26.72% | ― | |
78 Outperform | $24.56B | 24.52 | 30.33% | ― | 6.68% | 6.08% | |
74 Outperform | $50.68B | 32.78 | 21.43% | ― | 58.74% | 1127.29% | |
72 Outperform | $33.84B | 13.38 | 12.93% | ― | 4.60% | 425.38% | |
61 Neutral | $49.34B | ― | -7.35% | ― | 27.79% | 56.19% | |
61 Neutral | $14.97B | ― | -2.26% | ― | 42.54% | 91.01% | |
60 Neutral | $11.39B | 10.50 | -6.42% | 2.97% | 7.77% | -11.17% |
* Technology Sector Average
Performance Comparison
HOOD
Robinhood Markets
57.43
39.41
218.70%
CPAY
Corpay Inc
349.67
66.37
23.43%
XYZ
Block
55.02
-16.18
-22.72%
NET
Cloudflare
142.36
69.01
94.08%
AFRM
Affirm Holdings
53.74
20.30
60.71%
TOST
Toast Inc
42.87
15.71
57.84%
Robinhood Markets Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 16.94%|
Next Earnings Date:Jul 30, 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 Markets 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
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.