What’s Happening With Robinhood Stock?

Robinhood Markets (NASDAQ:HOOD) stock surged by close to 26% over the past month driven by a couple of notable developments. Most prominently, the company launched tokenized stocks, which are essentially blockchain-based equity derivatives offering over 200 U.S. stocks and ETFs for trading by customers in the European Union. In fact, the company is offering tokens linked to the valuation of privately held companies such as OpenAI and SpaceX for E.U. customers.  Separately, the company closed its acquisition of global cryptocurrency exchange operator Bitstamp, which gives it over 50 active licenses and registrations around the world. While Robinhood has been offering crypto trading services for a few years now, the deal helps the company double down on the enterprise space, while boosting its lending and staking infrastructure, while offering more specialized products built for hedge funds, fintechs, and registered investment advisors. The markets have also been increasingly focused on the crypto narrative in recent months, fueled by a more favorable regulatory outlook and growing support from the Trump administration, and this has helped the stock.

So is HOOD attractive at current levels of around $95 per share? Robinhood stock has momentum on its side, with strong recent growth and margins, although there are some risks investors should be aware of.  However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Robinhood Markets’ Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, HOOD stock looks expensive compared to the broader market.

• Robinhood Markets has a price-to-sales (P/S) ratio of 24.1 vs. a figure of 3.1 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 74.5 compared to 20.9 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 49.5 vs. the benchmark’s 26.9

How Have Robinhood Markets’ Revenues Grown Over Recent Years?

Robinhood Markets’ Revenues have grown considerably over recent years.

• Robinhood Markets has seen its top line grow at an average rate of 30.0% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 59.6% from $2.0 Bil to $3.3 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 50.0% to $927 Mil in the most recent quarter from $618 Mil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is Robinhood Markets?

Robinhood Markets’ profit margins are considerably higher than most companies in the Trefis coverage universe.

• Robinhood Markets’ Operating Income over the last four quarters was $1.3 billion, which represents a considerably high Operating Margin of 39.0%
• For the last four-quarter period, Robinhood Markets’ Net Income was $1.6 billion – indicating a considerably high Net Income Margin of 48.8% (vs. 11.6% for S&P 500)

How Resilient Is HOOD Stock During A Downturn?

HOOD stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• HOOD stock fell 90.2% from a high of $70.39 on 4 August 2021 to $6.89 on 16 June 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 June 2025
• Since then, the stock has increased to a high of $97.98 on 5 July 2025

Covid Pandemic (2020)

• HOOD stock fell 75.7% from a high of $70.39 on 4 August 2021 to $17.11 on 29 December 2021, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 June 2025

Putting All The Pieces Together: What It Means For HOOD Stock

In summary, Robinhood Markets’ performance across the parameters detailed above are as follows:

• Growth: Extremely Strong
• Profitability: Extremely Strong
• Financial Stability: Weak
• Downturn Resilience: Weak
• Overall: Strong

While HOOD stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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