Robinhood Markets, Inc. Fundamental Analysis (NASDAQ: HOOD)
Robinhood Markets, Inc. Fundamental Analysis (NASDAQ: HOOD)
Robinhood Markets, Inc. (NASDAQ: HOOD) shows strong financial fundamentals with a PE ratio of 37.60, profit margin of 39.04%, and ROE of 20.92%. The company generates $4.5B in annual revenue with strong year-over-year growth of 51.58%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 83.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze HOOD's fundamental strength across five key dimensions:
Efficiency Score
WeakHOOD struggles to generate sufficient returns from assets.
Valuation Score
ModerateHOOD shows balanced valuation metrics.
Growth Score
ExcellentHOOD delivers strong and consistent growth momentum.
Financial Health Score
ExcellentHOOD maintains a strong and stable balance sheet.
Profitability Score
ExcellentHOOD achieves industry-leading margins.
Key Financial Metrics
Is HOOD Expensive or Cheap?
P/E Ratio
HOOD trades at 37.60 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HOOD's PEG of -3.23 indicates potential undervaluation.
Price to Book
The market values Robinhood Markets, Inc. at 7.43 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 29.11 times EBITDA. This signals the market has high growth expectations.
How Well Does HOOD Make Money?
Net Profit Margin
For every $100 in sales, Robinhood Markets, Inc. keeps $39.04 as profit after all expenses.
Operating Margin
Core operations generate 45.65 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.92 in profit for every $100 of shareholder equity.
ROA
Robinhood Markets, Inc. generates $3.40 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Robinhood Markets, Inc. generates strong operating cash flow of $2.69B, reflecting robust business health.
Free Cash Flow
Robinhood Markets, Inc. generates strong free cash flow of $2.62B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.31 in free cash annually.
FCF Yield
HOOD converts 4.47% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
37.60
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-3.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.43
vs 25 benchmark
P/S Ratio
Price to sales ratio
12.91
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.27
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.24
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How HOOD Stacks Against Its Sector Peers
| Metric | HOOD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 37.60 | 20.15 | Worse (Expensive) |
| ROE | 20.92% | 630.00% | Weak |
| Net Margin | 39.04% | -696.00% (disorted) | Strong |
| Debt/Equity | 0.27 | 0.87 | Strong (Low Leverage) |
| Current Ratio | 1.24 | 803.39 | Neutral |
| ROA | 3.40% | 286.00% | Weak |
HOOD outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Robinhood Markets, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
346.77%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
25639.65%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-16.46%
Industry Style: Value, Dividend, Cyclical
Declining