Robinhood Markets, Inc. (HOOD)
Valuation Overview•Is Robinhood Markets, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Moderate quality score of 67/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street sentiment is generally neutral. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
HOOD demonstrates strong business quality with robust profitability and healthy margins. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company maintains stable top-line performance paired with stable bottom-line earnings. This growth is supported by elite operational efficiency, sustaining an impressive 46.3% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.1B | +51.6% | — | — | — | |
| EBITDA | $434.0M | — | — | — | — | |
| Net Income | $350.0M | +33.5% | — | — | — | |
| EPS (Diluted) | $0.38 | +31.4% | — | +259.8% | — | |
| Free Cash Flow | $1.2B | +1054.7% | — | -2.5% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 82.3% | 85.0% | 76.7% | 75.0% |
| Operating Margin | 46.3% | 17.9% | -21.6% | -20.7% |
| Net Margin | 41.1% | 20.3% | -43.6% | -36.5% |
| FCF Margin | 46.8% | 30.9% | -5.5% | 87.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.39 | $0.38 | -1.4% | ||
| Q1'26 | $0.63 | $0.66 | +4.6% | ||
| Q4'25 | $0.54 | $0.61 | +13.4% | ||
| Q3'25 | $0.31 | $0.42 | +36.9% | ||
| Q2'25 | $0.33 | $0.37 | +13.7% | ||
| Q1'25 | $0.42 | $0.54 | +29.1% | ||
| Q4'24 | $0.18 | $0.17 | -5.6% | ||
| Q3'24 | $0.15 | $0.21 | +40.0% |
Total return is +38.0% (1Y), outperforming the benchmark by +13.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -6.1% | -15.4% | — |
| 1Y | +38.0% | +13.0% | — |
| 3YCAGR | +121.1% | +99.6% | — |
| 5YCAGR | +25.4% | +12.3% | — |
| 10YCAGR | +12.0% | -2.0% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Robinhood Markets, Inc. (HOOD) valuation, health, and returns.
Robinhood Markets, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -48.4% downside from DCF intrinsic value of $55.84)
Robinhood Markets, Inc. has multiple valuation anchors: DCF Intrinsic Value: $55.84 | Peer Relative Fair Value: $34.78 | Wall Street Analyst Target: $108.14 (implying -0.0% upside). A convergence of these signals offers higher conviction.
Robinhood Markets, Inc. displays good financial health with a composite quality score of 67/100, supported by a Piotroski F-Score of 4/9, Return on Invested Capital (ROIC) of 7.9%.
Robinhood Markets, Inc. returns capital via buybacks instead of dividends, carrying a 0.7% buyback yield and reducing outstanding shares by +1.4% in the last 12 months.
Robinhood Markets, Inc.'s current growth trajectory is Stable. The company achieved +51.6% 1Y revenue growth and +31.4% 1Y EPS growth, compared to its 3Y revenue CAGR of N/A.
Wall Street consensus is Buy based on 25 analysts, beating EPS expectations in 83% of recent quarters with a -1-quarter streak. The consensus price target represents a -0.0% change from current levels.
Investment risks for Robinhood Markets, Inc. include: -57.3% 1-year max drawdown, high beta (3.08x market volatility). Volatility risk is characterized by a beta of 3.08x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.