Is HOOD severely overpriced? I think so.
EBITDA (Q1 2025):
= Net Income + Income Tax + D&A + Interest
= 336 + 35 + 20 + 9 = 400 ($M) for Q1
Annualized EBITDA (2025):
= Q1 EBITDA * 4
= 400 * 4 = 1,600 ($M)
EBITDA per Share (2025):
= EBITDA (annualized) / Diluted Shares
= 1,600,000,000 / 909,241,619 = $1.76
2019/2020 EBITDA per Share:
(Estimated due to lack of historic data; use $0.10 as proxy.)
5-Year CAGR:
= (Ending Value / Beginning Value) ^ (1/5) - 1
= (1.76 / 0.10) ^ (1/5) - 1
= (17.6)^(0.2) - 1 ≈ 73.6%, capped at 20%
Fair Value:
= PEG * Growth Rate * EPS
= 1 * 20 * 1.48 = $29.60