I've been scoping out growth stocks that have been demolished recently to try to find hidden gems, so I decided to look into Robinhood. As bad as their earnings report was recently, there's an even worse badness hiding in their numbers.
Even though their revenue for the year was 1.8 billion. Their share-based compensation was almost 1.6 billion. Based on their current market cap, that's about a 14% dilution. Also they're projecting this upcoming year to have a share-based comp of between 0.93B and 1B. This is palantir level dilution with a shaky business model. If you're buying this right now, you should hope they get bought by a larger brokerage firm. Buyer beware.
Edit: For those interested in the source, go to page 4 of their earnings release for their 2022 projections. “Additionally, we expect share-based compensation to decline 35-40% year-over-year. ” That decline is coming from a share comp of 1.6B.
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