HOOD gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 237 industry peers in the Capital Markets industry. While HOOD is still in line with the averages on profitability rating, there are concerns on its financial health. HOOD shows excellent growth, but is valued quite expensive already.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

HOOD had positive earnings in the past year.
HOOD had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: HOOD reported negative net income in multiple years.
In multiple years HOOD reported negative operating cash flow during the last 5 years.

1.2 Ratios

HOOD has a better Return On Assets (5.29%) than 68.07% of its industry peers.
HOOD's Return On Equity of 25.61% is amongst the best of the industry. HOOD outperforms 91.18% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.58%, HOOD is in the better half of the industry, outperforming 76.05% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	5.29%
ROE	25.61%
ROIC	6.58%

ROA(3y)-0.7%

ROA(5y)-4.14%

ROE(3y)-1.72%

ROE(5y)-11.11%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

HOOD has a better Profit Margin (52.19%) than 90.76% of its industry peers.
HOOD has a better Operating Margin (48.24%) than 86.13% of its industry peers.
The Gross Margin of HOOD (95.15%) is better than 95.38% of its industry peers.
In the last couple of years the Gross Margin of HOOD has grown nicely.

		Industry Rank	Sector Rank
OM	48.24%
PM (TTM)	52.19%
GM	95.15%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y1.02%

GM growth 5Y2.46%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

HOOD has more shares outstanding than it did 1 year ago.
The number of shares outstanding for HOOD has been increased compared to 5 years ago.
Compared to 1 year ago, HOOD has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 2.13 indicates that HOOD is not a great score, but indicates only limited risk for bankruptcy at the moment.
HOOD has a better Altman-Z score (2.13) than 68.91% of its industry peers.
HOOD has a debt to FCF ratio of 14.00. This is a negative value and a sign of low solvency as HOOD would need 14.00 years to pay back of all of its debts.
HOOD has a Debt to FCF ratio of 14.00. This is comparable to the rest of the industry: HOOD outperforms 59.24% of its industry peers.
HOOD has a Debt/Equity ratio of 1.83. This is a high value indicating a heavy dependency on external financing.
HOOD has a worse Debt to Equity ratio (1.83) than 76.47% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.83
Debt/FCF	14
Altman-Z	2.13

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

A Current Ratio of 1.22 indicates that HOOD should not have too much problems paying its short term obligations.
HOOD's Current ratio of 1.22 is in line compared to the rest of the industry. HOOD outperforms 55.88% of its industry peers.
HOOD has a Quick Ratio of 1.22. This is a normal value and indicates that HOOD is financially healthy and should not expect problems in meeting its short term obligations.
HOOD has a Quick ratio of 1.22. This is in the better half of the industry: HOOD outperforms 60.08% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.22
Quick Ratio	1.22

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

HOOD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 308.47%, which is quite impressive.
Looking at the last year, HOOD shows a very strong growth in Revenue. The Revenue has grown by 74.58%.
The Revenue has been growing by 60.45% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)308.47%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%258.82%

Revenue 1Y (TTM)74.58%

Revenue growth 3Y17.59%

Revenue growth 5Y60.45%

Sales Q2Q%100%

3.2 Future

The Earnings Per Share is expected to grow by 20.63% on average over the next years. This is a very strong growth
Based on estimates for the next years, HOOD will show a quite strong growth in Revenue. The Revenue will grow by 18.41% on average per year.

EPS Next Y33.47%

EPS Next 2Y28.76%

EPS Next 3Y23.03%

EPS Next 5Y20.63%

Revenue Next Year58.21%

Revenue Next 2Y40.12%

Revenue Next 3Y30.55%

Revenue Next 5Y18.41%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 44.39, the valuation of HOOD can be described as expensive.
Based on the Price/Earnings ratio, HOOD is valued a bit more expensive than 78.99% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, HOOD is valued quite expensively.
With a Price/Forward Earnings ratio of 41.11, HOOD can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, HOOD is valued a bit more expensive than 70.59% of the companies in the same industry.
HOOD is valuated expensively when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	44.39
Fwd PE	41.11

4.2 Price Multiples

64.29% of the companies in the same industry are more expensive than HOOD, based on the Enterprise Value to EBITDA ratio.
HOOD's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	85.97
EV/EBITDA	39.43

4.3 Compensation for Growth

HOOD's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
HOOD has a very decent profitability rating, which may justify a higher PE ratio.
HOOD's earnings are expected to grow with 23.03% in the coming years. This may justify a more expensive valuation.