Is Robinhood Markets, Inc. overvalued or undervalued?

As of 30 July 2025, the valuation grade for Robinhood Markets, Inc. has moved from expensive to very expensive, indicating a significant decline in perceived value. The company is considered overvalued based on its current metrics. The P/E ratio stands at 42, while the EV to EBITDA ratio is 45.15, and the PEG ratio is notably low at 0.04, suggesting that the stock price may not be justified by its earnings growth potential.
In comparison to peers, Robinhood's P/E ratio of 42 is lower than that of a comparable company, which has a P/E of approximately 58.29, but still reflects a premium valuation. Additionally, the EV to EBITDA ratio of 45.15 is also high relative to the peer average, reinforcing the notion of overvaluation. Despite this, Robinhood has outperformed the S&P 500 significantly, with a year-to-date return of 224.5% compared to the S&P 500's 12.22%, indicating strong market momentum but raising concerns about sustainability at such elevated valuation levels.