Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Robinhood Markets's Probability of Financial Distress (%) is 0.06%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Robinhood Markets (WAR:HOOD) Probability of Financial Distress (%) Explanation
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Robinhood Markets Probability of Financial Distress (%) Related Terms
WAR:HOOD vs IBKR, CRCL, IREN: Probability of Financial Distress (%) Comparison
For the Capital Markets subindustry, Robinhood Markets's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Robinhood Markets Probability of Financial Distress (%) vs Capital Markets Industry
For the Capital Markets industry and Financial Services sector, Robinhood Markets's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Robinhood Markets's Probability of Financial Distress (%) falls into.
Robinhood Markets Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
LPFD
=
-20.12 * NIMTAAVG
+
1.60 * TLMTA
-
7.88 * EXRETAVG
+
1.55 * SIGMA
-
0.005 * RSIZE
-
2.27 * CASHMTA
+
0.070 * MB
-
0.09 * PRICE
-
8.87
=
-7.41
The Probability of Financial Distress (%) (PFD) was then obtianed by:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
What does a Probability of Financial Distress (%) of 0.06% mean?
Robinhood Markets (WAR:HOOD) has a Probability of Financial Distress (%) of 0.06% as of Jun. 25, 2026.
Is Robinhood Markets' Probability of Financial Distress (%) too high?
Robinhood Markets' current Probability of Financial Distress (%) is 0.06%. Overall, Robinhood Markets has a GF Score™ of 52/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Robinhood Markets' Probability of Financial Distress (%) compare to IBKR and CRCL?
Robinhood Markets' Probability of Financial Distress (%) of 0.06% can be compared against companies in the Capital Markets industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Probability of Financial Distress (%) for a Capital Markets company?
A good Probability of Financial Distress (%) depends on the Capital Markets industry context. However, Probability of Financial Distress (%) should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Probability of Financial Distress (%) mean?
A high Probability of Financial Distress (%) can signal that a stock is expensive relative to its fundamentals. Robinhood Markets's current Probability of Financial Distress (%) is 0.06%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Robinhood Markets stock overvalued right now?
Based on GuruFocus' analysis, Robinhood Markets (WAR:HOOD) is currently considered Significantly Overvalued. The stock's GF Value™ is zł237.15, compared to a current price of zł370.80 — trading 56.4% above its estimated fair value. The current Probability of Financial Distress (%) is 0.06%. Robinhood Markets' overall GF Score™ is 52/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Probability of Financial Distress (%) calculated?
Probability of Financial Distress (%) is calculated from a company's financial statements. For Robinhood Markets (WAR:HOOD), the current Probability of Financial Distress (%) is 0.06% as of Jun. 25, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Robinhood Markets (WAR:HOOD) Overvalued in 2026?
Based on GuruFocus' analysis, Robinhood Markets stock appears to be overvalued.
The current stock price of zł370.80 is trading 56.4% above its estimated GF Value™ of zł237.15.
GuruFocus considers Robinhood Markets to be Significantly Overvalued.
Key valuation signals for WAR:HOOD:
Probability of Financial Distress (%): 0.06%
GF Value™: zł237.15 vs. price of zł370.80 (56.4% above fair value)
No single metric tells the full story. See the WAR:HOOD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Robinhood is a diversified financial services provider best known for its retail brokerage platform, which historically caters to a young, risk-seeking clientele that trades heavily on margin and in higher-risk asset classes like options, futures, cryptocurrencies, and more recently, in prediction markets. As those customers' financial needs have begun to mature, Robinhood has rolled out a suite of more conventional products, from retirement accounts to high-yield cash sweep accounts to nascent advisory services (Robinhood Strategies). With $322 billion in customer assets and 27 million active accounts at year-end 2025, the firm has emerged as a significant player in the large, quickly growing US brokerage market.
52GF Score
Get the complete analysis for WAR:HOOD
Probability of Financial Distress (%) is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
WAR:HOOD has been successfully added to your 