QS Research · Michael Burry's Scion Capital analyst template · 2006
Robinhood Markets, Inc. (HOOD)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -22% · downside -54% · upside 0%
HOOD is not cheap on the only defensible base in the file: TTM net income of $1.98B on 911.0M shares is $2.17 EPS, and at the highest profitable broker peer multiple of 28.0x it is worth $60.8, or -22.5% from $78.39; at SCHW's 16.5x it is $35.8, -54.3%, and at HOOD's own 36.0x it is only about $78.1. The cyclical normalization does not rescue it: FY2020-FY2025 net income averages -$328M versus TTM $1.98B, so the valuation leans on unusually strong TTM earnings, not a proven through-cycle figure. The balance sheet is a real offset (net cash of about $2.95B after debt and leases, $789M TTM buybacks, 24.8% TTM ROE), and new lines are growing, but the stock still trades at 9.0x stale FY2024 book and 36.0x TTM. Base at 28.0x, downside at 16.5x and upside at 36.0x leave all scenarios at or below today's price, yet the base is not -30% enough to meet the short rule, so this is a watch, not a long or a short.
Key numbers
- Share price: $78.39
- Market cap: $71.41B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $5.08B
- P/E (TTM): 36.0x
The 15 boxes
- ✓ 1. Long-form business notes
Robinhood is a vertically integrated, self-clearing retail broker that monetizes transaction flow (options, event contracts, futures, crypto), a flat-fee Gold subscription, and interest on margin, securities lending and cash sweep; revenue ran $1.81B in FY2021, fell to $1.36B in FY2022 (-25%), then compounded to $2.95B in FY2024 and $4.47B in FY2025. Pre-tax income was negative in FY2021-FY2023 (-$3.69B, -$1.03B, -$533.0M) and turned to $1.06B in FY2024 and $2.11B in FY2025. Between the FY2021 and FY2025 10-Ks the product set widened from 7 cryptocurrencies and a mobile-only U.S. brokerage to 58 U.S. crypto assets, desktop (Legend), futures, prediction markets, banking, a credit card, wealth management, RIA custody and U.K./EU operations. The sources do not give a share price, price/book, or segment revenue split, so no valuation multiple is shown here.
- ✓ 2. Competitive advantage
HOOD's 10-K claims a moat from brand, vertical integration, regulatory licences and operating efficiency, but the source record shows a cyclical, transaction-sensitive business rather than a proven durable advantage. Revenue went from $1.81B in FY2021 to $1.36B in FY2022 and $4.47B in FY2025, while pre-tax income was negative in FY2021-FY2023 and positive only in FY2024-FY2025. It competes with large legacy financial institutions, large technology companies and smaller fintech entrants.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) showed a 12% revenue increase to $1,424 million, but net income attributable to Robinhood fell 16% to $468 million as operating expenses rose 16% to $739 million and other income swung to a $60 million loss on RVI/RVII marks. Revenue growth was concentrated in event contracts (+541% to $173 million) and options (+31% to $399 million), while crypto fell 55% to $120 million and net interest revenue fell 9% to $415 million. Cash was $5.83 billion plus $164 million stablecoin at 2026-09-30; TTM net deposits were $71.0 billion, and the 10-Q flags potential Fed rate cuts as a net-interest-revenue headwind and event-contract regulation as a risk.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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