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Despite its impressive fundamentals, NYSE:BRK.B remains undervalued.

By Mill Chart

Last update: Feb 12, 2024

Discover BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B)—an undervalued stock our stock screener has picked out. NYSE:BRK.B demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

Valuation Insights: NYSE:BRK.B

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:BRK.B has earned a 8 for valuation:

  • The Price/Earnings ratio is 0.02, which indicates a rather cheap valuation of BRK.B.
  • Based on the Price/Earnings ratio, BRK.B is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
  • BRK.B's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.94.
  • With a Price/Forward Earnings ratio of 0.01, the valuation of BRK.B can be described as very cheap.
  • Compared to the rest of the industry, the Price/Forward 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.
  • The average S&P500 Price/Forward Earnings ratio is at 21.56. BRK.B is valued rather cheaply when compared to this.
  • Based on the Enterprise Value to EBITDA ratio, BRK.B is valued a bit cheaper than 64.08% of the companies in the same industry.
  • BRK.B's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • BRK.B has a very decent profitability rating, which may justify a higher PE ratio.

Assessing Profitability for NYSE:BRK.B

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:BRK.B has achieved a 6:

  • With an excellent Return On Assets value of 7.53%, BRK.B belongs to the best of the industry, outperforming 85.44% of the companies in the same industry.
  • BRK.B's Return On Equity of 14.62% is fine compared to the rest of the industry. BRK.B outperforms 73.79% of its industry peers.
  • BRK.B has a Return On Invested Capital of 3.97%. This is in the better half of the industry: BRK.B outperforms 71.84% of its industry peers.
  • The 3 year average ROIC (3.32%) for BRK.B is below the current ROIC(3.97%), indicating increased profibility in the last year.
  • The Profit Margin of BRK.B (21.99%) is better than 79.61% of its industry peers.
  • BRK.B's Operating Margin has improved in the last couple of years.
  • In the last couple of years the Gross Margin of BRK.B has grown nicely.

How We Gauge Health for 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 has a better Altman-Z score (2.34) than 79.61% of its industry peers.
  • The Debt to FCF ratio of BRK.B (4.67) is better than 66.99% of its industry peers.
  • A Debt/Equity ratio of 0.24 indicates that BRK.B is not too dependend on debt financing.
  • BRK.B has a better Debt to Equity ratio (0.24) than 64.08% of its industry peers.

ChartMill's Evaluation of Growth

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:BRK.B has earned a 6 for growth:

  • The Earnings Per Share has grown by an nice 15.06% over the past year.
  • The Earnings Per Share has been growing by 18.98% on average over the past years. This is quite good.
  • BRK.B shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.05%.
  • Based on estimates for the next years, BRK.B will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.96% on average per year.
  • BRK.B is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.11% yearly.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of BRK.B for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.