Critical Contrast: Robinhood Markets (HOOD) and Its Rivals

Robinhood Markets (NASDAQ:HOOD) is one of 1,743 public companies in the “Capital Markets” industry, but how does it compare to its peers? We will compare Robinhood Markets to related businesses based on the strength of its risk, dividends, analyst recommendations, earnings, valuation, institutional ownership and profitability.

Profitability

This table compares Robinhood Markets and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Robinhood Markets	39.04%	21.49%	4.16%
Robinhood Markets Competitors	316.00%	10.03%	3.52%

Valuation and Earnings

This table compares Robinhood Markets and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Robinhood Markets	$4.47 billion	$1.88 billion	38.98
Robinhood Markets Competitors	$2.32 billion	$399.31 million	17.15

Robinhood Markets has higher revenue and earnings than its peers. Robinhood Markets is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Robinhood Markets has a beta of 2.56, meaning that its stock price is 156% more volatile than the S&P 500. Comparatively, Robinhood Markets’ peers have a beta of 0.79, meaning that their average stock price is 21% less volatile than the S&P 500.

Institutional and Insider Ownership

93.3% of Robinhood Markets shares are owned by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are owned by institutional investors. 13.5% of Robinhood Markets shares are owned by company insiders. Comparatively, 13.0% of shares of all “Capital Markets” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Robinhood Markets and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Robinhood Markets	1	6	28	1	2.81
Robinhood Markets Competitors	5574	20179	22520	647	2.37

Robinhood Markets currently has a consensus target price of $126.45, suggesting a potential upside of 49.50%. As a group, “Capital Markets” companies have a potential upside of 23.12%. Given Robinhood Markets’ stronger consensus rating and higher probable upside, research analysts plainly believe Robinhood Markets is more favorable than its peers.

Summary

Robinhood Markets beats its peers on 12 of the 13 factors compared.

Robinhood Markets Company Profile

Robinhood Markets, Inc. operates a digital financial services platform that gives customers access to investing and financial products through its website and mobile app. Its offerings include trading in stocks, exchange-traded funds, options and cryptocurrencies, as well as retirement accounts and cash-management services. Founded in 2013 by Vlad Tenev and Baiju Bhatt, Robinhood built its business around making financial services more accessible through a mobile-first platform. The company is headquartered in Menlo Park, California, and serves customers in the United States and select international markets.