Our stock screening tool has pinpointed BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B) as an undervalued stock. NYSE:BRK.B maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.
Valuation Assessment of NYSE:BRK.B
To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:BRK.B has achieved a 9 out of 10:
- A Price/Earnings ratio of 0.02 indicates a rather cheap valuation of BRK.B.
- Compared to the rest of the industry, the Price/Earnings ratio of BRK.B indicates a rather cheap valuation: BRK.B is cheaper than 100.00% of the companies listed in the same industry.
- BRK.B is valuated cheaply when we compare the Price/Earnings ratio to 25.50, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 0.01, which indicates a rather cheap valuation of BRK.B.
- Based on the Price/Forward Earnings ratio, BRK.B is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
- BRK.B's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 18.66.
- 83.84% of the companies in the same industry are more expensive than BRK.B, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of BRK.B indicates a somewhat cheap valuation: BRK.B is cheaper than 69.70% of the companies listed in the same industry.
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of BRK.B may justify a higher PE ratio.
- A more expensive valuation may be justified as BRK.B's earnings are expected to grow with 12.33% in the coming years.
Profitability Examination for NYSE:BRK.B
ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:BRK.B has earned a 7 out of 10:
- The Return On Assets of BRK.B (8.34%) is better than 85.86% of its industry peers.
- With an excellent Return On Equity value of 16.09%, BRK.B belongs to the best of the industry, outperforming 82.83% of the companies in the same industry.
- The Return On Invested Capital of BRK.B (3.54%) is better than 74.75% of its industry peers.
- The last Return On Invested Capital (3.54%) for BRK.B is above the 3 year average (3.32%), which is a sign of increasing profitability.
- BRK.B has a better Profit Margin (26.09%) than 83.84% of its industry peers.
- In the last couple of years the Operating Margin of BRK.B has grown nicely.
- In the last couple of years the Gross Margin of BRK.B has grown nicely.
Evaluating Health: NYSE:BRK.B
ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:BRK.B scores a 5 out of 10:
- BRK.B's Altman-Z score of 1.64 is fine compared to the rest of the industry. BRK.B outperforms 69.70% of its industry peers.
- BRK.B has a Debt to FCF ratio of 4.83. This is in the better half of the industry: BRK.B outperforms 66.67% of its industry peers.
- A Debt/Equity ratio of 0.23 indicates that BRK.B is not too dependend on debt financing.
- BRK.B has a Debt to Equity ratio of 0.23. This is in the better half of the industry: BRK.B outperforms 61.62% of its industry peers.
- The Current ratio of BRK.B (1.47) is better than 63.64% of its industry peers.
A Closer Look at Growth for NYSE:BRK.B
ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:BRK.B, the assigned 6 reflects its growth potential:
- The Earnings Per Share has grown by an nice 10.09% over the past year.
- BRK.B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.98% yearly.
- Looking at the last year, BRK.B shows a quite strong growth in Revenue. The Revenue has grown by 15.03% in the last year.
- BRK.B is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.33% yearly.
- BRK.B is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.58% yearly.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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Our latest full fundamental report of BRK.B contains the most current fundamental analsysis.
This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.