Comprehensive Stock Comparison
Compare LPL Financial Holdings Inc. (LPLA) vs Robinhood Markets, Inc. (HOOD) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | HOOD | 58.2% revenue growth vs LPLA's 37.2% |
| Value | LPLA | Lower P/E (12.7x vs 31.6x) |
| Quality / Margins | HOOD | 47.8% net margin vs LPLA's 5.1% |
| Stability / Safety | LPLA | Beta 1.30 vs HOOD's 2.62 |
| Dividends | Tie | Neither pays a meaningful dividend |
| Momentum (1Y) | HOOD | +51.4% vs LPLA's -18.9% |
| Efficiency (ROA) | HOOD | 4.9% ROA vs LPLA's 4.7%, ROIC 6.2% vs 16.1% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
LPL Financial operates a comprehensive brokerage and investment advisory platform for independent financial advisors and advisors at financial institutions across the United States. It generates revenue primarily through asset-based fees (roughly 60% of revenue), transaction commissions (about 25%), and cash sweep programs (approximately 15%). The company's key advantage is its massive scale and integrated technology platform that serves over 22,000 advisors—creating significant switching costs and network effects in the independent advisor channel.
Robinhood is a mobile-first financial services platform that enables commission-free trading of stocks, ETFs, options, and cryptocurrencies. It generates revenue primarily from payment for order flow — earning fees from market makers for routing trades — along with margin lending, subscription services, and interest on customer cash balances. Its key advantage is a user-friendly interface that democratized investing for retail customers, creating strong network effects through its social features and educational content.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
HOOD leads in 2 of 6 categories (Financial Metrics, Profitability & Efficiency). LPLA leads in 2 (Valuation Metrics, Risk & Volatility). 1 tied.
Financial Metrics (TTM)
LPLA is the larger business by revenue, generating $17.0B annually — 5.8x HOOD's $3.0B. HOOD is the more profitable business, keeping 47.8% of every revenue dollar as net income compared to LPLA's 5.1%.
| Metric | LPLALPL Financial Hol… | HOODRobinhood Markets… |
|---|---|---|
| RevenueTrailing 12 months | $17.0B | $3.0B |
| EBITDAEarnings before interest/tax | $2.3B | $2.2B |
| Net IncomeAfter-tax profit | $863M | $1.9B |
| Free Cash FlowCash after capex | -$1.6B | $1.6B |
| Gross MarginGross profit ÷ Revenue | +25.6% | +82.9% |
| Operating MarginEBIT ÷ Revenue | +13.4% | +35.8% |
| Net MarginNet income ÷ Revenue | +5.1% | +47.8% |
| FCF MarginFCF ÷ Revenue | — | -5.8% |
| Rev. Growth (YoY)Latest quarter vs prior year | — | — |
| EPS Growth (YoY)Latest quarter vs prior year | +4.2% | -34.6% |
Valuation Metrics
At 27.5x trailing earnings, LPLA trades at a 43% valuation discount to HOOD's 48.6x P/E. On an enterprise value basis, LPLA's 10.4x EV/EBITDA is more attractive than HOOD's 62.0x.
| Metric | LPLALPL Financial Hol… | HOODRobinhood Markets… |
|---|---|---|
| Market CapShares × price | $24.0B | $67.1B |
| Enterprise ValueMkt cap + debt − cash | $30.3B | $70.2B |
| Trailing P/EPrice ÷ TTM EPS | 27.51x | 48.62x |
| Forward P/EPrice ÷ next-FY EPS est. | 12.65x | 31.64x |
| PEG RatioP/E ÷ EPS growth rate | 2.07x | — |
| EV / EBITDAEnterprise value multiple | 10.38x | 61.98x |
| Price / SalesMarket cap ÷ Revenue | 1.42x | 22.73x |
| Price / BookPrice ÷ Book value/share | 4.44x | 8.62x |
| Price / FCFMarket cap ÷ FCF | — | — |
Profitability & Efficiency
HOOD delivers a 20.6% return on equity — every $100 of shareholder capital generates $21 in annual profit, vs $16 for LPLA. HOOD carries lower financial leverage with a 0.94x debt-to-equity ratio, signaling a more conservative balance sheet compared to LPLA's 1.36x. On the Piotroski fundamental quality scale (0–9), HOOD scores 4/9 vs LPLA's 2/9, reflecting mixed financial health.
| Metric | LPLALPL Financial Hol… | HOODRobinhood Markets… |
|---|---|---|
| ROE (TTM)Return on equity | +16.1% | +20.6% |
| ROA (TTM)Return on assets | +4.7% | +4.9% |
| ROICReturn on invested capital | +16.1% | +6.2% |
| ROCEReturn on capital employed | +19.1% | +14.2% |
| Piotroski ScoreFundamental quality 0–9 | 2 | 4 |
| Debt / EquityFinancial leverage | 1.36x | 0.94x |
| Net DebtTotal debt minus cash | $4.2B | $3.1B |
| Cash & Equiv.Liquid assets | $1.0B | $4.3B |
| Total DebtShort + long-term debt | $7.3B | $7.5B |
| Interest CoverageEBIT ÷ Interest expense | 3.85x | 95.77x |
Total Returns (with DRIP)
A $10,000 investment in LPLA five years ago would be worth $22,612 today (with dividends reinvested), compared to $21,783 for HOOD. Over the past 12 months, HOOD leads with a +51.4% total return vs LPLA's -18.9%. The 3-year compound annual growth rate (CAGR) favors HOOD at 96.0% vs LPLA's 6.8% — a key indicator of consistent wealth creation.
| Metric | LPLALPL Financial Hol… | HOODRobinhood Markets… |
|---|---|---|
| YTD ReturnYear-to-date | -16.9% | -34.2% |
| 1-Year ReturnPast 12 months | -18.9% | +51.4% |
| 3-Year ReturnCumulative with dividends | +21.8% | +653.2% |
| 5-Year ReturnCumulative with dividends | +126.1% | +117.8% |
| 10-Year ReturnCumulative with dividends | +1437.2% | +117.8% |
| CAGR (3Y)Annualised 3-year return | +6.8% | +96.0% |
Risk & Volatility
LPLA is the less volatile stock with a 1.30 beta — it tends to amplify market swings less than HOOD's 2.62 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. LPLA currently trades 74.4% from its 52-week high vs HOOD's 49.3% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | LPLALPL Financial Hol… | HOODRobinhood Markets… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.30x | 2.62x |
| 52-Week HighHighest price in past year | $403.58 | $153.86 |
| 52-Week LowLowest price in past year | $262.83 | $29.66 |
| % of 52W HighCurrent price vs 52-week peak | +74.4% | +49.3% |
| RSI (14)Momentum oscillator 0–100 | 38.5 | 41.9 |
| Avg Volume (50D)Average daily shares traded | 712K | 23.8M |
Analyst Outlook
Wall Street rates LPLA as "Buy" and HOOD as "Buy". Consensus price targets imply 75.1% upside for HOOD (target: $133) vs 52.9% for LPLA (target: $459).
| Metric | LPLALPL Financial Hol… | HOODRobinhood Markets… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $459.17 | $132.80 |
| # AnalystsCovering analysts | 22 | 23 |
| Dividend YieldAnnual dividend ÷ price | — | — |
| Dividend StreakConsecutive years of raises | 3 | — |
| Dividend / ShareAnnual DPS | — | — |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | +0.4% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Aug 21 | Feb 26 | Change |
|---|---|---|---|
| LPL Financial Holdi… (LPLA) | 100 | 272.07 | +172.1% |
| Robinhood Markets, … (HOOD) | 108.21 | 258.21 | +138.6% |
LPL Financial Holdi… (LPLA) returned +126% over 5 years vs Robinhood Markets, … (HOOD)'s +118%. A $10,000 investment in LPLA 5 years ago would be worth $22,612 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| LPL Financial Holdi… (LPLA) | $4.0B | $17.0B | +319.6% |
| Robinhood Markets, … (HOOD) | $278M | $3.0B | +963.3% |
LPL Financial Holdings Inc.'s revenue grew from $4.0B (2016) to $17.0B (2025) — a 17.3% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| LPL Financial Holdi… (LPLA) | 4.7% | 5.1% | +7.2% |
| Robinhood Markets, … (HOOD) | -38.4% | 47.8% | +224.5% |
LPL Financial Holdings Inc.'s net margin went from 5% (2016) to 5% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| LPL Financial Holdi… (LPLA) | 22.1 | 32.7 | +48.0% |
LPL Financial Holdings Inc. has traded in a 13x–33x P/E range over 9 years; current trailing P/E is ~28x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| LPL Financial Holdi… (LPLA) | 2.13 | 10.92 | +412.7% |
| Robinhood Markets, … (HOOD) | -0.13 | 1.56 | +1344.0% |
LPL Financial Holdings Inc.'s EPS grew from $2.13 (2016) to $10.92 (2025) — a 20% CAGR.
Chart 6Free Cash Flow — 5 Years
LPL Financial Holdings Inc. generated $0M FCF in 2025 (-100% vs 2021). Robinhood Markets, Inc. generated $-170M FCF in 2024 (+82% vs 2021).
LPLA vs HOOD: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is LPLA or HOOD a better buy right now?
LPL Financial Holdings Inc. (LPLA) offers the better valuation at 27.5x trailing P/E (12.7x forward), making it the more compelling value choice. Analysts rate LPL Financial Holdings Inc. (LPLA) a "Buy" — based on 22 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — LPLA or HOOD?
On trailing P/E, LPL Financial Holdings Inc. (LPLA) is the cheapest at 27.5x versus Robinhood Markets, Inc. at 48.6x. On forward P/E, LPL Financial Holdings Inc. is actually cheaper at 12.7x.
03Which is the better long-term investment — LPLA or HOOD?
Over the past 5 years, LPL Financial Holdings Inc. (LPLA) delivered a total return of +126.1%, compared to +117.8% for Robinhood Markets, Inc. (HOOD). A $10,000 investment in LPLA five years ago would be worth approximately $23K today (assuming dividends reinvested). Over 10 years, the gap is even starker: LPLA returned +1437% versus HOOD's +117.8%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — LPLA or HOOD?
By beta (market sensitivity over 5 years), LPL Financial Holdings Inc. (LPLA) is the lower-risk stock at 1.30β versus Robinhood Markets, Inc.'s 2.62β — meaning HOOD is approximately 102% more volatile than LPLA relative to the S&P 500. On balance sheet safety, Robinhood Markets, Inc. (HOOD) carries a lower debt/equity ratio of 94% versus 136% for LPL Financial Holdings Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — LPLA or HOOD?
Robinhood Markets, Inc. (HOOD) is the more profitable company, earning 47.8% net margin versus 5.1% for LPL Financial Holdings Inc. — meaning it keeps 47.8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: HOOD leads at 35.8% versus 13.4% for LPLA. At the gross margin level — before operating expenses — HOOD leads at 82.9%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is LPLA or HOOD more undervalued right now?
On forward earnings alone, LPL Financial Holdings Inc. (LPLA) trades at 12.7x forward P/E versus 31.6x for Robinhood Markets, Inc. — 19.0x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for HOOD: 75.1% to $132.80.
07Which pays a better dividend — LPLA or HOOD?
None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.
08Is LPLA or HOOD better for a retirement portfolio?
For long-horizon retirement investors, LPL Financial Holdings Inc. (LPLA) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1.30), +1437% 10Y return). Robinhood Markets, Inc. (HOOD) carries a higher beta of 2.62 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (LPLA: +1437%, HOOD: +117.8%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between LPLA and HOOD?
Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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