Up Over 200% in the Past Year, Is It Too Late to Invest in Robinhood Stock?

One of the hottest stocks with retail investors in the past year has been Robinhood Markets (NASDAQ: HOOD). Shares of the financial services company are up more than 230% during the past 12 months (as of June 17), with its valuation soaring past $66 billion.

But with the business generating strong growth and profits rising, could there still be room for more gains ahead for investors who buy the fintech stock today? Here's a closer look at whether it could still be a good buy right now.

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Image source: Getty Images.

Robinhood has been a growth machine

It's hard to argue with the returns Robinhood has been generating in the past year when you consider just how impressive its performance has looked. During the first quarter of 2025, the company's revenue rose by 50% year over year, to $927 million. And while that may seem high, it hasn't been out of the norm for the business of late.

HOOD Operating Revenue (Quarterly YoY Growth) data by YCharts

The business did experience some challenges in 2022 when the markets were in turmoil, but as investor sentiment has improved, and there's more interest in crypto these days, Robinhood's trading platform has been more popular than ever. One way to gauge the interest of retail investors is to simply look at how well Robinhood is doing because it's one of the most popular trading platforms for young and novice investors, providing them with real-time market data and commission-free trading.

Robinhood has an impressive 96% customer retention rate, and with it looking to expand into more types of products and services (e.g. credit cards, prediction markets, futures), there is the potential for much more growth ahead.

Has Robinhood's valuation gotten too rich?

There's no doubt Robinhood is growing at an exceptional pace, and that there's still more room for growth, but what about its valuation? The biggest question mark right now is whether the stock is simply too expensive, despite its fantastic results.

The company has been scaling its business effectively, and in 2024 it generated $1.4 billion in profit on revenue of almost $3 billion, for an impressive profit margin of 48%. Its price-to-earnings (P/E) multiple has been coming down as the business has grown, but it's still at a fairly high 41.

HOOD PE Ratio data by YCharts

The average P/E multiple on the S&P 500 index is less than 24. Investors who buy Robinhood stock today are paying a high premium for the business. It boils down to whether it's worth it, and if you think the growth potential is there, then it might be.

Should you invest in Robinhood stock today?

Robinhood's stock may not look incredibly cheap, but given the growth potential it has, it can still make for an excellent long-term investment. It's popular with retail investors, it has a high retention rate, and its margins are impressive, which is why I believe its valuation can climb even higher in the years ahead.

There can and will inevitably be volatility as a result of investor sentiment, but in the long run I believe there will be greater interest in stocks and crypto from retail investors. And with Robinhood establishing itself as a trusted name among young investors, it can be a big benefactor from all of that growth. That's why, even though it has generated some impressive gains in the past year, it still might not be too late to invest in the business.

Should you invest $1,000 in Robinhood Markets right now?

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.