Is Robinhood Markets, Inc. overvalued or undervalued?

As of 12 May 2025, the valuation grade for Robinhood Markets, Inc. has moved from fair to expensive. The company is currently overvalued based on its financial metrics. Key ratios include a P/E ratio of 42, an EV to EBITDA of 45.15, and a PEG ratio of 0.04, which suggests that the stock price is not justified by its earnings growth potential.
In comparison to peers, Robinhood's P/E ratio is significantly higher than that of F5, Inc., which has a P/E of 26.22, and DocuSign, Inc., with a P/E of 13.66, both categorized as attractive. Additionally, Robinhood's EV to EBITDA ratio is also elevated compared to the industry, indicating a premium valuation. Despite recent strong stock performance, with a year-to-date return of 104.91% compared to the S&P 500's 2.44%, the current valuation does not appear sustainable given the financial ratios.