ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Robinhood Markets's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 7.18%.
As of today (2026-06-26), Robinhood Markets's WACC % is 22.00%. Robinhood Markets's ROC % is 10.34% (calculated using TTM income statement data).
Robinhood Markets earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Robinhood Markets (TSX:HOOD) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Robinhood Markets's WACC % is 22.00%. Robinhood Markets's ROC % is 10.34% (calculated using TTM income statement data).
Robinhood Markets earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Robinhood Markets ROC % Related Terms
Robinhood Markets ROC % Historical Data
* Premium members only.
The historical data trend for Robinhood Markets's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Robinhood Markets (TSX:HOOD) has a ROC % of 7.18% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Robinhood Markets and its competitors.
Is Robinhood Markets' ROC % too high?
Robinhood Markets' current ROC % is 7.18%. The Capital Markets industry median ROC % is 1.23. Robinhood Markets' value of 7.18% is 486.1% above this industry median. Overall, Robinhood Markets has a GF Score™ of 57/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Robinhood Markets' ROC % compare to IBKR and CRCL?
Robinhood Markets' ROC % of 7.18% can be compared against companies in the Capital Markets industry. The industry median ROC % is 1.23. Robinhood Markets' value of 7.18% is 486.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Capital Markets company?
The median ROC % among Capital Markets companies is 1.23, based on 694 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Robinhood Markets's current ROC % of 7.18% is 486.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Robinhood Markets and its competitors. For the Capital Markets industry, the median ROC % is 1.23 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Robinhood Markets's current ROC % is 7.18%. 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 (TSX:HOOD) is currently considered Significantly Overvalued. The stock's GF Value™ is C$10.26, compared to a current price of C$15.31 — trading 49.2% above its estimated fair value. The current ROC % is 7.18% and 486.1% above the Capital Markets industry median of 1.23. Robinhood Markets' overall GF Score™ is 57/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Robinhood Markets (TSX:HOOD), the current ROC % is 7.18% as of Mar. 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 (TSX:HOOD) Overvalued in 2026?
Based on GuruFocus' analysis, Robinhood Markets stock appears to be overvalued.
The current stock price of C$15.31 is trading 49.2% above its estimated GF Value™ of C$10.26.
GuruFocus considers Robinhood Markets to be Significantly Overvalued.
Key valuation signals for TSX:HOOD:
ROC %: 7.18%
GF Value™: C$10.26 vs. price of C$15.31 (49.2% above fair value)
Industry Position: 486.1% above the Capital Markets median
No single metric tells the full story. See the TSX: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.
57GF Score
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