Robinhood Markets, Inc. (HOOD) Fair Value & PE Analysis
Financial - Capital Markets · NASDAQ
Current Price
$109.51
PE Ratio (TTM)
47.4x
Intrinsic Value
$167.64
+34.7% margin of safety
What Is Robinhood Markets, Inc.'s Fair Value?
As of 2026-10-07, applying a 47.6x earnings multiple to Robinhood Markets, Inc.'s (HOOD) earnings per share of $2.3 yields a fair value estimate of $167.64 per share, versus a market price of $109.51.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $145.42 to $192.42. 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)
Is Robinhood Markets, Inc. (HOOD) Overvalued?
At $109.51, 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, often younger, user base. This scale creates a network effect, making it a go-to platform for new investors.
↑Simplified User Experience
The platform's intuitive and user-friendly interface lowers the barrier to entry for investing. This ease of use fosters customer loyalty and repeat engagement.
↑Expansion into New Offerings
Diversifying into areas like crypto and prediction markets broadens Robinhood's appeal. This expansion can create stickiness and capture more of the user's financial activity.
INVESTMENT RISKS
↓Dependence on Transactional Revenue
A significant portion of Robinhood's revenue is tied to trading volumes and payment for order flow. Market downturns or changes in payment for order flow practices can severely impact profitability.
↓Customer Acquisition and Retention Costs
Attracting and retaining users in a competitive landscape requires substantial marketing and promotional spending. High churn rates or increased acquisition costs can pressure margins.
↓Reputational Damage from Past Events
Past controversies, such as the GameStop saga, have damaged Robinhood's reputation. Negative public perception can deter new users and alienate existing ones.
Base case
HOOD base case PE valuation
Intrinsic Value
$167.64
Margin of safety
+34.7%
Expected annual return
+8.9%
Base case assumptions: 17.7% annual earnings growth, 47.61x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-07.
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.
Customize the HOOD PE valuation
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 HOODCompany Overview
Robinhood 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.
Financial Metrics — HOOD PE Stock Valuation Data
PE Ratio (TTM)
47.4x
PEG Ratio
3.44
Earnings Yield
2.10%
ROE (TTM)
22.7%
Revenue/Share (TTM)
$5.49
Debt/Equity
2.40x
Frequently Asked Questions
What is the PE ratio of HOOD?
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.
Is HOOD overvalued based on PE ratio?
HOOD's PE of 47.4x combined with a PEG ratio of 3.44 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. 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.
How do I value HOOD stock using PE ratio?
To value Robinhood Markets, Inc. using PE: (1) Compare the current PE (47.4x) against the Financial - Capital Markets median to assess relative pricing, (2) check the PEG ratio (3.44) 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.
What is the PEG ratio of HOOD?
HOOD's PEG ratio is 3.44, calculated by dividing the PE ratio (47.4x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for HOOD stock valuation?
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 22.7%, 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.
Learn More
- See HOOD DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Financial Services valuationsP/E and DCF value HOOD with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.