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 39.43, profit margin of 49.82%, and ROE of 22.70%. The company generates $4.2B 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 60.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
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
WeakHOOD trades at a premium to fair value.
Growth Score
ExcellentHOOD delivers strong and consistent growth momentum.
Financial Health Score
ModerateHOOD shows balanced financial health with some risks.
Profitability Score
ModerateHOOD maintains healthy but balanced margins.
Key Financial Metrics
Is HOOD Expensive or Cheap?
P/E Ratio
HOOD trades at 39.43 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HOOD's PEG of 2.86 indicates potential overvaluation.
Price to Book
The market values Robinhood Markets, Inc. at 8.64 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 40.68 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 $49.82 as profit after all expenses.
Operating Margin
Core operations generate 30.90 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $22.70 in profit for every $100 of shareholder equity.
ROA
Robinhood Markets, Inc. generates $3.66 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Robinhood Markets, Inc. generates limited operating cash flow of $-583.05M, signaling weaker underlying cash strength.
Free Cash Flow
Robinhood Markets, Inc. generates weak or negative free cash flow of $-638.06M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.71 in free cash annually.
FCF Yield
HOOD converts -0.78% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
39.43
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.86
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.64
vs 25 benchmark
P/S Ratio
Price to sales ratio
19.69
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.92
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.22
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.23
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How HOOD Stacks Against Its Sector Peers
| Metric | HOOD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 39.43 | 21.15 | Worse (Expensive) |
| ROE | 22.70% | 652.00% | Weak |
| Net Margin | 49.82% | -455.00% (disorted) | Strong |
| Debt/Equity | 2.92 | 0.87 | Weak (High Leverage) |
| Current Ratio | 1.22 | 886.19 | Neutral |
| ROA | 3.66% | 4492792.00% | Weak |
HOOD outperforms its industry in 1 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