Robinhood Markets (HOOD) AI Stock Analysis

• Market Cap: $37.38B
• Dividend Yield: N/A
• Average Volume (3M): 52.19M
• Price to Earnings (P/E): 27.0
• Beta (1Y): 2.54
• Revenue Growth: 57.26%
• EPS Growth: N/A
• Country: US
• Employees: 2,300
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Infrastructure
• EPS (TTM): 1.56
• Shares Outstanding: 767,947,900
• 10 Day Avg. Volume: 55,701,070
• 30 Day Avg. Volume: 52,192,306
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 16.31
• Price to Cash Flow (P/CF): 5.40
• P/FCF Ratio: 4.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $63.06
• Price Target Upside: 55.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Robinhood Markets demonstrates strong financial recovery with significant revenue and profitability growth. The strengthened balance sheet and strategic advancements, such as market share expansion and new product launches, are promising. However, liquidity concerns and regulatory challenges present risks that require careful management. The stock's valuation is moderate, with technical indicators reflecting mixed momentum. Overall, Robinhood shows potential for continued growth, but investors should remain cautious of potential headwinds.

Positive Factors

Product Expansion

Robinhood announced products that move the firm into new sizable addressable markets.

Revenue Growth

Robinhood is expected to generate significant revenue from prediction markets annually, indicating potential growth.

Subscription Growth

Gold subscriptions are growing at a greater than 70% annualized rate, indicating strong organic asset growth and a path to more stable revenues.

Negative Factors

Crypto Volumes

Macro headwinds are impacting Robinhood's crypto volumes more than equities/options.

Retail Trading Activity

Equities volumes declined by 20%, and the equities market share fell to 0.74% from 1.03%, indicating a reduction in retail trading activity.

Trading Volumes

Robinhood's March trading volumes suggest revenue is tracking slightly below forecasts, indicating potential challenges.

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 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 Financial Statement Overview

Summary

Robinhood Markets shows significant improvements in revenue and profitability, overcoming past financial challenges. The balance sheet is strengthened with no debt, although cash flow management needs attention due to recent negative trends. Overall, promising recovery indicators are visible, but vigilance is needed to maintain momentum.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.95B	1.89B	1.38B	1.84B	958.83M
	Gross Profit
2.60B	1.71B	1.17B	1.35B	484.28M
	EBIT
1.05B	-513.00M	-942.00M	-3.67B	13.78M
	EBITDA
1.13B	-442.00M	-881.00M	-3.64B	23.72M
	Net Income Common Stockholders
1.41B	-541.00M	-1.03B	-3.69B	2.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.26B	4.83B	7.34B	8.13B	1.40B
	Total Assets
26.19B	32.33B	23.34B	19.77B	10.99B
	Total Debt
7.46B	3.55B	2.98B	5.64B	1.98B
	Net Debt
3.13B	-1.29B	-3.36B	-617.55M	572.59M
	Total Liabilities
18.21B	25.64B	16.38B	12.48B	8.86B
	Stockholders Equity
7.97B	6.70B	6.96B	7.29B	2.12B
Cash Flow		Free Cash Flow
-170.00M	1.16B	-909.00M	-968.43M	1.84B
	Operating Cash Flow
-157.00M	1.18B	-852.00M	-884.77M	1.88B
	Investing Cash Flow
-148.00M	-582.00M	-60.00M	-237.88M	-32.33M
	Financing Cash Flow
-345.00M	-610.00M	-1.82B	5.20B	1.28B

Robinhood Markets Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 40.51
• 50DMA: Negative
• 100DMA: Negative
• 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 Neutral. The current price of 40.51 is below the 20-day moving average (MA) of 41.54, below the 50-day MA of 46.93, and above the 200-day MA of 33.34, indicating a neutral trend. The MACD of -1.19 indicates Negative momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 27.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HOOD.

Robinhood Markets Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	74 Outperform	$72.14B	24.65	19.20%	0.58%	19.54%	22.23%
MS	73 Outperform	$180.16B	14.06	13.16%	3.25%	7.16%	53.77%
SCHW	72 Outperform	$140.30B	25.19	13.30%	1.35%	1.87%	17.63%
AMTD	71 Outperform	$1.07B	―	11.11%	―	―	―
GS	70 Outperform	$160.64B	12.75	11.95%	2.27%	14.80%	77.97%
HOOD	68 Neutral	$37.38B	27.02	19.24%	―	57.26%	―
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%

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.