Financial - Capital Markets · NASDAQ
Current Price
$91.43
PE Ratio (TTM)
41.6x
Intrinsic Value
$142.75
+36.0% margin of safety
As of 2026-10-28, applying a 41.4x earnings multiple to Robinhood Markets, Inc.'s (HOOD) earnings per share of $2.21 yields a fair value estimate of $142.75 per share, versus a market price of $91.43.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $122.86 to $165.01. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · HOOD intrinsic value (DCF view)
At $91.43, HOOD trades below its PE-based fair value estimate by a wide margin. By this model the stock looks cheap relative to its earnings power, but check whether earnings are sustainable before reading too much into it.
COMPETITIVE MOAT
↑Brand Recognition and User Base
Robinhood has cultivated strong brand recognition, attracting a large, digitally native user base. This scale provides a foundation for future product expansion and network effects.
↑Low-Cost Trading Platform
Its commission-free trading model democratized access to financial markets. This has created a sticky customer base accustomed to low transaction costs.
↑Expanding Product Ecosystem
Robinhood is actively diversifying beyond stock trading into areas like crypto and banking. This multiproduct strategy aims to increase customer engagement and revenue streams.
INVESTMENT RISKS
↓Dependence on Transaction Volume
A significant portion of Robinhood's revenue is tied to trading activity. Market volatility or a sustained downturn in trading can materially impact financial performance.
↓Crypto Revenue Volatility
Recent declines in crypto revenue highlight the inherent volatility of digital asset markets. This segment's performance is unpredictable and can significantly affect overall results.
↓Execution Risk on New Ventures
Robinhood's strategy involves launching multiple new businesses simultaneously. Successfully executing and scaling these diverse ventures presents a significant operational challenge.
Base case
Intrinsic Value
$142.75
Margin of safety
+36.0%
Expected annual return
+9.3%
Base case assumptions: 17.9% annual earnings growth, 41.37x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-28.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Robinhood Markets, Inc. respond.
Open PE Calculator for HOODRobinhood Markets, Inc. operates a financial services platform available to users throughout the United States. This platform empowers individuals to engage in a wide array of investments, encompassing common stocks, exchange-traded funds (ETFs), options contracts, gold, and various cryptocurrencies. Beyond its core trading functionalities, the company dedicates efforts to providing educational and informational resources. These include "Snacks," a concise daily summary of business news; "Learn," an extensive digital library offering guides, tutorials, and a comprehensive financial dictionary; and "Newsfeeds," which grants complimentary access to premium financial journalism from reputable sources like Barron's, Reuters, and The Wall Street Journal. Additionally, the platform supports users with tools such as customizable watchlists and alert systems for monitoring specific securities, ETFs, and digital assets. It also provides cash management services. For new customers, particularly those who have not yet made their initial investment, Robinhood offers personalized first trade recommendations. Robinhood Markets, Inc. was established in 2013 and maintains its principal operations from Menlo Park, California.
PE Ratio (TTM)
41.6x
PEG Ratio
n/m
Earnings Yield
2.42%
ROE (TTM)
20.9%
Revenue/Share (TTM)
$5.66
Debt/Equity
0.27x
The trailing twelve-month PE ratio of HOOD reflects how much investors pay per dollar of Robinhood Markets, Inc.'s earnings. This metric is most useful when compared to Financial - Capital Markets peers and the company's own historical range.
HOOD's PE of 41.6x combined with a PEG ratio of -3.57 provides a growth-adjusted perspective. HOOD has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Financial - Capital Markets, a DCF analysis may be more appropriate.
To value Robinhood Markets, Inc. using PE: (1) Compare the current PE (41.6x) against the Financial - Capital Markets median to assess relative pricing, (2) check the PEG ratio (-3.57) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
HOOD's PEG ratio is -3.57, calculated by dividing the PE ratio (41.6x) by the expected earnings growth rate. Because HOOD has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
PE ratio gives a quick relative read — how HOOD is priced versus Financial - Capital Markets peers. DCF provides an absolute value based on projected free cash flows. For HOOD, with a strong ROE of 20.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
P/E and DCF value HOOD with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.