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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Robinhood runs a mobile and desktop platform for trading stocks, options, futures, event contracts and crypto, plus retirement accounts, managed portfolios, banking and credit cards. Its customers were 28.6 million funded, mostly US retail investors at August 2026, alongside advisors using TradePMR and Bitstamp exchange users. [S1][S4]
In Q2 2026, 59% of revenue came from transactions (order-routing payments on options and equities, event-contract fees, crypto spreads), 30% from net interest on customer balances and margin loans, and 11% from Gold subscriptions and services. [S1]
Explore the research to see how business evidence informs assumptions and valuation.
Start with the business evidence, then follow the assumptions through to scenarios and valuation.
Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Valuation and assumptionsRobinhood is a profitable, strengthening platform gathering assets several times faster than incumbents, but the $122.70 price requires roughly a decade of 20%+ revenue growth that current evidence does not yet support.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: It converts the $122.70 price into the growth and margin path Robinhood must deliver, which is the core of the valuation disagreement.
Record Q2 2026 trading activity normalizes while sports event contracts face state restrictions, slowing growth and compressing a premium multiple.
Contracts priced between $0.01 and $1 that pay $1 if a specified event occurs, traded on CFTC-registered venues.
In this report: They grew over 10x to 12% of Q2 revenue, but sports contracts face adverse court rulings and state orders.
Robinhood earns most revenue from customer activity (options and equity order routing, event contracts, crypto spreads: 59% of Q2 2026 revenue) and from interest on customer balances (30%), with subscriptions and services at 11%. Costs are largely fixed, so profit swings with activity.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: Robinhood's costs are mostly fixed, so revenue swings from trading activity move profits disproportionately in both directions.
Payments a broker receives from market makers for routing customer orders to them, instead of charging customers a commission.
In this report: Options and equities, largely monetized through order-routing payments, were 36% of Q2 2026 revenue, so any regulatory change directly affects revenue.
A reverse DCF at a 10% cost of equity requires about 21.5% annual revenue growth to 2035 at a 55% operating margin, taking revenue to roughly Schwab's current scale. At 12.4% it requires about 29%.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: It converts the $122.70 price into the growth and margin path Robinhood must deliver, which is the core of the valuation disagreement.
The weighted average required return of a company's debt and equity providers, used to discount cash flows to the firm.
In this report: With almost no debt, WACC is close to the 12.4% cost of equity; a 1-point change moves base value about $5.5 per share.
Base-case intrinsic value is about $35 per share and probability-weighted value about $34, far below the analysis price even at a 10% cost of equity. The business is good; the stock prices in a bull outcome. Stance: avoid, with growth duration as the main source of possible error.
Net income minus the equity a company must retain to fund growth, leaving what could be paid to shareholders.
In this report: Robinhood's reported operating cash flow is distorted by customer balances, so the valuation uses net income less retained capital instead.
Revenue growth duration: net deposits were 24% of assets over the year to August but slowed to 14% annualized in August. Each 2-point change in annual growth moves base value about $4 per share.
Customer cash and asset transfers into the platform minus withdrawals and transfers out over a period, expressed here as a percentage of starting platform assets.
In this report: It is Robinhood's organic growth engine and the best leading indicator of future net interest and trading revenue.
Retail activity level: Q2 volumes were records across equities, options and event contracts, while crypto revenue fell 38%. A permanent 10% revenue shift moves value about $3.5 per share.
Long-run operating margin after SBC: 47% in 2025 and 41.5% in H1 2026. The base case assumes 50%; each 3 points moves value about $2 per share.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: Robinhood's costs are mostly fixed, so revenue swings from trading activity move profits disproportionately in both directions.
Activity falls from record levels, sports contracts are restricted and rates are cut; revenue drops about 10% in 2027 and sticky costs hold margins near 35%.
Deposit growth fades as the asset base grows and revenue yield on assets falls; revenue growth slows from 18% to 7% while fixed-cost leverage lifts margin to 50%.
International customers and US tokenized equities scale, event contracts are federally preempted and deposits sustain 20%+; revenue reaches about $20bn by 2035 at a 58% margin.
Monthly net deposits as a share of platform assets: sustained readings above 22% would weaken the valuation objection; below 12% for two quarters would support it.
Customer cash and asset transfers into the platform minus withdrawals and transfers out over a period, expressed here as a percentage of starting platform assets.
In this report: It is Robinhood's organic growth engine and the best leading indicator of future net interest and trading revenue.
Transaction revenue per funded customer in Q3 and Q4 2026, to test whether Q2 was a peak.
The Supreme Court certiorari decision and CFTC rulemaking on sports event contracts.
Contracts priced between $0.01 and $1 that pay $1 if a specified event occurs, traded on CFTC-registered venues.
In this report: They grew over 10x to 12% of Q2 revenue, but sports contracts face adverse court rulings and state orders.
Not established from primary sources: the PFOF share of transaction revenue; the sports share of event-contract revenue; Class B voting terms and executive award terms; acquisition purchase prices; the company's disclosed interest-rate sensitivity; gross customer churn; segment profitability; consensus EPS and revenue estimates; competitor valuation multiples. Years 5 to 10 growth rates rest on assumption rather than evidence.
These model scenarios depend on their inputs. Review the assumptions and supporting evidence alongside the implied values.
revenue multiple v1 · as of 2026-10-18
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