On October 20th, Robinhood (HOOD) had another strong session—up 4.53% on the day. That pop was a good excuse for me to zoom out and revisit whether HOOD looks like a buy, hold, or sell from a longer-term perspective.
Recent Performance Snapshot
- 6 months: up ~240%
- Year to date: up ~244%
- 1 year: up ~403.52%
- Public since: July 2021 (not quite a full 5-year history yet)
Momentum has clearly been on Robinhood’s side lately.
Why the Momentum? A Few 2025 Highlights
Strong financial performance (Q1 2025):
- Total net revenues up ~50% YoY
- Net income up ~114% YoY (beat expectations)
- Funded customers up ~8% YoY
- Total platform assets up ~70% YoY
Product expansion:
They’ve leaned into new ideas, including prediction markets (e.g., NFL and college football) through a partnership with Koshi, which has helped drive enthusiasm and engagement.
Management commentary / deposits:
In Q2 2025, management sounded confident about Q3, citing strong trading across asset classes and ~$6B in net deposits in July.
Near-Term Outlook (Q3 2025)
- Earnings date: November 5
- Consensus EPS: about $0.49 (versus $0.17 in Q3 2024)
- Projected growth: ~80% YoY
Both management and analysts are primed for a strong print.
Valuation & Fundamentals (How I’m Framing It)
PE ratio: ~69 (give or take, depending on source and whether it’s trailing or forward). High—but so are many growth/tech names.
No dividend:
This is a growth story. If you want current income, this doesn’t fit.
Balance sheet checks:
- Price-to-book: ~14.29 (not outrageous for a high-growth platform business)
- Return on assets (ROA): ~4.91% (the low end of the “decent” range; I typically like 5–10%+)
- Assets vs. liabilities: Positive, though I prefer closer to a 2:1 cushion. This isn’t a red flag by itself, just one datapoint.
Time-Frame Cross-Check
I like to compare a quarter-length window to longer spans so a single spike doesn’t skew the story. Over the last 3 months, HOOD is up ~25.7%—healthy, without relying on day-to-day noise.
Ownership & Sentiment
Hedge funds:
Ownership decreased by ~2.79M shares in Q2 vs. Q1, and selling outpaced buying through much of 2024 and 2025. Not decisive on its own, but worth watching.
Insiders:
Five informative sales totaling ~3.1M shares in the last three months. Insiders often sell for many reasons (diversification, options exercising), so I don’t over-weight this alone.
Analyst consensus:
Roughly 73% Buy, 23% Hold, ~3.8% Sell. Also, they’ve beaten earnings estimates in nearly every quarter on the chart I’m tracking, with one narrow miss (Q3 FY2024).
Alternative Valuation Lenses
EV/EBITDA: ~71.46, which ranks worse than ~92% of capital-markets peers. On paper, that’s expensive. That said, some of the best performers I’ve owned looked “expensive” on EV/EBITDA while they were compounding.
Forward PEG (12-month, NASDAQ): ~3.43. I prefer lower, but again, PEG is a guide—not gospel—and is sensitive to growth assumptions.
Culture & Leadership (Soft, but I Still Check It)
- Overall rating: 3.6/5 (could be higher, but not bad)
- “Best Places to Work” nominations: twice in recent years
- CEO approval: ~77% (solid)
I treat culture as a small—yet meaningful—signal of leadership quality and execution risk.
My Verdict: Buy (Not a “Strong Buy”)
I have HOOD in the Buy bucket—but not as a “back-up-the-truck” position. Why?
Bull case I like
- Rapid user/asset growth with improving profitability
- Product velocity (e.g., prediction markets) and broader engagement
- Strong execution against Street expectations
What tempers me
- Valuation screens (PE, EV/EBITDA, PEG) look rich; the stock needs continued massive growth to justify them
- Ownership trends (hedge fund and insider selling) aren’t tailwinds, even if not decisive
Position sizing:
If I were only buying one stock this month, I wouldn’t allocate the entire budget to HOOD. I’d lean ¼ to ½ sized, then reassess after Q3 results and any follow-through in deposits, trading activity, and user growth.
Benchmark goal:
I think HOOD still has a credible shot to outperform the S&P 500 over the next few years, as it has in the past 12 months—but you’re paying up for that growth.
What I’m Watching Next
- Q3 print (Nov 5): EPS trajectory, revenue mix, and any guidance updates
- Net deposits / assets: Whether July’s ~$6B momentum persists
- Product adoption: Do newer features (like prediction markets) drive engagement without adding operational risk?
- Margins: Operating leverage as scale increases
- Valuation drift: Does multiple compress while growth holds, creating a better entry to add?
This is not financial advice. I’m sharing how I personally analyze HOOD based on my goals and risk tolerance. Always do your own research and make decisions that fit your time horizon, portfolio mix, and preferences.
