1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Metrics vs Peers
3. Price Chart
4. Valuation
5. Offer Terms
6. Financial Statements
Discussion
Research report, target price, DCF and forensic scores are for subscribers. View plans
Symbol
HOOD
Listed on
2021-07-29
Sector
Financials
Subsector
Capital Markets
Offer Price
$38.00
first filed $38.00–$42.00Shares Offered
55M
842.4M
$32.0B
6.5%
Implied Upside vs Midpoint
Description
Our mission is to democratize finance for all. Robinhood was founded on the belief that everyone should be welcome to participate in our financial system. We are creating a modern financial services platform for everyone, regardless of their wealth, income or background. The stock market is widely recognized as one of the greatest wealth creators of the last century. But systemic barriers to investing, like expensive commissions, minimum balance requirements and complicated, jargon-filled paperwork, have dissuaded millions of people from feeling welcome or able to participate. Robinhood has set out to change this. We use technology to deliver a new way for people to interact with the financial system. We believe investing should be familiar and welcoming, with a simple design and an intuitive interface, so that customers are empowered to achieve their goals. We started with a revolutionary, bold brand and design, and the Robinhood app now makes investing approachable for millions. Revenue model. Our mission to democratize finance for all drives our revenue model. We pioneered commission-free trading with no account minimums, giving smaller investors access to the financial markets. Many of our customers are getting started with less, which often means they are trading a smaller number of shares. Rather than earning revenue from fixed trading commissions which, before Robinhood introduced commission free trading, had often ranged from $8 to $10 per trade, the significant majority of our revenue is transaction-based. We earn transaction-based revenue from market markers in exchange for routing our users’ equity, option and cryptocurrency trade orders to market makers for execution. With respect to equities and options trading, such fees are known as payment for order flow, or PFOF, and with respect to cryptocurrency trading such fees are known as “Transaction Rebates.” For the three months ended March 31, 2021, PFOF and Transaction Rebates represented 81% of our total revenues and, as a result, our revenues are currently substantially dependent on these fees. Our transaction-based revenue model could be harmed by decreased levels of trading generally or by industry or regulatory changes that could tighten spreads on transactions. In addition, PFOF practices have drawn heightened scrutiny from the U.S. Congress, the SEC and other regulatory and legislative authorities. These regulators and authorities may adopt additional regulation relating to, or any bans or limitations on, PFOF practices as a result of such heightened scrutiny or otherwise pursue additional inquiries or investigations relating to PFOF practices. Any such restrictions or bans on our ability to collect PFOF could impact the value of our Class A common stock offered by this prospectus. Cultural Impact. We pioneered commission-free stock trading with no account minimums, which the rest of the industry emulated, and we have continued to build relationships with our customers by introducing new products that further expand access to the financial system. We believe we have made investing culturally relevant and understandable, and that our platform is enabling our customers to become long-term investors and take greater control of their finances. Over half of 18-44 year olds in the United States know who Robinhood is according to an internal brand study that we conducted in March 2021. As a further sign of our relevance today, Robinhood reached the number-one spot on the Apple App Store multiple times in the first quarter of 2021 and was frequently ranked number one in the Finance category on the Apple App store during 2020 and the first quarter of 2021. Built for People. Customer feedback is at the heart of product development at Robinhood. In the early days, our founders would walk the campus of Stanford sharing product and design ideas and gathering real-time feedback. Today, we continue this tradition in a programmatic way, seeking customer perspectives to inform our priorities and inspire our innovation. We want to understand our customers and their expectations, ambitions, fears and challenges. Their insights help us focus on what is important and this approach enables us to expand our offering centered on their needs. Many of our customers are new to investing, and we are encouraged to see them taking their first steps toward wealth creation. We have replaced confusing jargon with simplicity and slang. Our tools are delightful and engaging. As of March 31, 2021, we had 18.0 million Net Cumulative Funded Accounts on our platform, and from January 1, 2015 to March 31, 2021, over half of the customers funding accounts on our platform told us that Robinhood was their first brokerage account. We believe that close to 50% of all new retail funded accounts opened in the United States from 2016 to 2021 were new accounts created on Robinhood, based on new account data from publicly reporting peer brokerages. Technological Innovation. We have built a foundation for future development. With a focused team and appropriate regulatory approvals, we created our own clearing platform. Our platform is entirely cloud-based and built on proprietary, API-driven services to meet the needs of a fast-growing, mobile-first, modern financial institution. Our platform also enables a vertically integrated, end-to-end approach to product development, which helps us move faster from idea to creation, empowers us to better scale with the growth of our business and affords us better unit economics that we can share with our customers. Our approach also provides increased internal visibility over clearing and settlement. We anticipate that our self-clearing platform will continue to position us well to further innovate for customers. Engagement through Education. Education is core to accomplishing our mission. We believe access to easy-to-understand investment information and education is fundamental to expanding participation in the U.S. financial system. This is why we have created educational content for everyone, no matter where they are on their investing journey. That means jargon-free financial literacy resources and digestible financial news direct to customers. As of March 31, 2021, our Robinhood Snacks newsletter and podcast had nearly 32 million subscribers, and the daily podcast was downloaded nearly 40 million times in 2020, with more than 10 million additional downloads in the three months ended March 31, 2021. Our library of financial literacy resources, Robinhood Learn, had more than seven million cumulative page views as of March 31, 2021, and monthly unique visits to Robinhood Learn rose nearly six-fold from January 2020 to March 2021. The Robinhood Platform. Our platform, which began as a U.S. stock-focused retail brokerage, currently offers: • trading in U.S. listed stocks and Exchange Traded Funds (“ETFs”), as well as related options and American Depositary Receipts (“ADRs”); • cryptocurrency trading through our subsidiary, Robinhood Crypto, LLC (“RHC”); • fractional trading, which enables all of our customers—regardless of budget—to build a diversified portfolio and access stocks previously out of reach; • recurring investments, which help customers make investing routine and employ dollar-cost averaging; • Cash Management, which includes Robinhood-branded debit cards and enables customers to save and spend by paying bills, writing checks, earning interest, withdrawing funds via ATMs and receiving Federal Deposit Insurance Corporation (“FDIC”) pass-through insurance on cash swept from their brokerage account; and • Robinhood Gold, our monthly paid subscription service that provides customers with premium features, such as enhanced instant access to deposits, professional research, Nasdaq Level II market data and, upon approval, access to margin investing. --- Financial Tool to Financial Network. We have seen an enthusiastic response from customers and are humbled by how often they share Robinhood with their families, friends and colleagues. This powerful word-of-mouth referral network has helped to rapidly grow our customer base. In 2020, our Net Cumulative Funded Accounts grew 143% to 12.5 million, increasing to 18.0 million as of March 31, 2021, with over 80% of new Funded Accounts in 2020 and in the three months ended March 31, 2021 joining our platform organically or through the Robinhood Referral Program. For the monthly cohorts in the year ended December 31, 2019, our average revenue payback period was approximately 13 months, and for the monthly cohorts in the year ended December 31, 2020, our average revenue payback period improved to less than five months. --- Future Vision. Our vision is for Robinhood to become the most trusted and most culturally relevant money app worldwide. We innovate at the epicenter of finance, technology and access for all. As we look to the future, we want to help Robinhood customers manage all aspects of their financial lives in one place. We envision them moving seamlessly between investing, saving and spending all on the Robinhood platform. When we check our email, there is a go-to app. When we need a map, there is a go-to app. We envision a world in which Robinhood is that go-to app for money. We believe people want to build financial independence and have the tools and ability to own their financial well-being. We look forward to being our customers' single money app that enables them to achieve those goals. --- We were incorporated in the State of Delaware on November 22, 2013. Our principal executive offices are located at 85 Willow Road in Menlo Park, California 94025, and our telephone number at that address is (844) 428-5411. Our website address is www.robinhood.com.
▼ More expensive than its peers on 2 of 2 valuation measures
| Metric | Value | Peer median | Among peers | Trend |
|---|---|---|---|---|
EV / revenue | 26.9x | 6.2x | ||
Price / earnings | >100x | 17.9x | ||
Revenue growth | 246% | 35.4% | ||
Net margin | 0.8% | 27.3% | ||
Free cash flow margin | 193% | 7.4% | ||
Net cash / market cap | 4.4% | 6.1% | ||
Debt / equity | 0.00 | 0.00 | ||
Stock comp / revenue | 2.5% | — | — | |
9 premium metrics: DCF value / price, Growth the price needs: how common, Last 12 months vs full year and 6 more Unlock | ||||
▼ Priced at $38.00, 5% below the midpoint of the first filed range ($38.00–$42.00, 2021-07-19).
Each filing is plotted ahead of the first trading day on the price chart.
| Filed | Form | Price range | Price | Shares offered | Deal size |
|---|---|---|---|---|---|
| 2021-07-19 | S-1/A | $38.00–$42.00 | — | 55,000,000 | $2.20B |
| 2021-07-27 | S-1/A | $38.00–$42.00 | — | 55,000,000 | $2.20B |
| 2021-07-30 | 424B4 | — | $38.00 | 55,000,000 | $2.09B |
| 2021-08-05 | S-1 | — | $37.68 | 97,876,033 | $3.69B |
Robinhood Markets, Inc. income statement and balance sheet, FY Dec 2022 to FY Dec 2025, as reported in SEC filings.
| Metric | FY Dec 2022after listing | FY Dec 2023after listing | FY Dec 2024after listing | FY Dec 2025after listing |
|---|---|---|---|---|
| Revenue | $1.4B | $1.9B | $3.0B | $4.5B |
| Net income | ($1.0B) | ($541M) | $1.4B | $1.9B |
| Revenue growth | — | 37.3% | 58.2% | 51.6% |
| Net margin | −75.7% | −29.0% | 47.8% | 42.1% |
| Metric | FY Dec 2022after listing | FY Dec 2023after listing | FY Dec 2024after listing | FY Dec 2025after listing |
|---|---|---|---|---|
| Total assets | $23.3B | $32.3B | $26.2B | $38.1B |
| Total liabilities | $16.4B | $25.6B | $18.2B | $29.0B |
| Total equity | $7.0B | $6.7B | $8.0B | $9.2B |
| Cash & equivalents | $6.3B | $4.8B | $4.3B | $4.3B |