LPL FINANCIAL HOLDINGS INC (LPLA) Stock Fundamental Analysis
NASDAQ:LPLA - Nasdaq - US50212V1008 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to LPLA. LPLA was compared to 237 industry peers in the Capital Markets industry. While LPLA has a great profitability rating, there are some minor concerns on its financial health. LPLA has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year LPLA was profitable.
In the past year LPLA had a positive cash flow from operations.
Each year in the past 5 years LPLA has been profitable.
LPLA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 6.40%, LPLA is doing good in the industry, outperforming 79.75% of the companies in the same industry.
LPLA has a better Return On Equity (22.03%) than 89.87% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.46%, LPLA belongs to the top of the industry, outperforming 84.81% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LPLA is significantly above the industry average of 7.69%.
The 3 year average ROIC (15.44%) for LPLA is well above the current ROIC(10.46%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.4% | ||
| ROE | 22.03% | ||
| ROIC | 10.46% |
ROA(3y)9.04%
ROA(5y)8.01%
ROE(3y)42.14%
ROE(5y)37.98%
ROIC(3y)15.44%
ROIC(5y)14.04%
1.3 Margins
LPLA has a Profit Margin of 7.91%. This is in the lower half of the industry: LPLA underperforms 63.71% of its industry peers.
LPLA's Profit Margin has declined in the last couple of years.
The Operating Margin of LPLA (13.92%) is worse than 65.82% of its industry peers.
In the last couple of years the Operating Margin of LPLA has declined.
Looking at the Gross Margin, with a value of 98.92%, LPLA belongs to the top of the industry, outperforming 99.16% of the companies in the same industry.
In the last couple of years the Gross Margin of LPLA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.92% | ||
| PM (TTM) | 7.91% | ||
| GM | 98.93% |
OM growth 3Y10.2%
OM growth 5Y-2.12%
PM growth 3Y12.79%
PM growth 5Y-3%
GM growth 3Y0.03%
GM growth 5Y0.02%
2. Health
2.1 Basic Checks
LPLA has about the same amout of shares outstanding than it did 1 year ago.
LPLA has less shares outstanding than it did 5 years ago.
LPLA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.47 indicates that LPLA is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.47, LPLA is doing good in the industry, outperforming 78.90% of the companies in the same industry.
LPLA has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
LPLA has a Debt to Equity ratio of 1.44. This is in the lower half of the industry: LPLA underperforms 68.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.47 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
LPLA has a Current Ratio of 3.05. This indicates that LPLA is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of LPLA (3.05) is better than 81.01% of its industry peers.
LPLA has a Quick Ratio of 3.05. This indicates that LPLA is financially healthy and has no problem in meeting its short term obligations.
LPLA has a better Quick ratio (3.05) than 81.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 3.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.80% over the past year.
The Earnings Per Share has been growing by 18.07% on average over the past years. This is quite good.
LPLA shows a strong growth in Revenue. In the last year, the Revenue has grown by 29.23%.
Measured over the past years, LPLA shows a quite strong growth in Revenue. The Revenue has been growing by 17.10% on average per year.
EPS 1Y (TTM)17.8%
EPS 3Y32.96%
EPS 5Y18.07%
EPS Q2Q%16.24%
Revenue 1Y (TTM)29.23%
Revenue growth 3Y17.06%
Revenue growth 5Y17.1%
Sales Q2Q%30.81%
3.2 Future
Based on estimates for the next years, LPLA will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.60% on average per year.
Based on estimates for the next years, LPLA will show a quite strong growth in Revenue. The Revenue will grow by 8.27% on average per year.
EPS Next Y17.17%
EPS Next 2Y18.73%
EPS Next 3Y20.06%
EPS Next 5Y10.6%
Revenue Next Year27.96%
Revenue Next 2Y22.15%
Revenue Next 3Y18.23%
Revenue Next 5Y8.27%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.44, which indicates a rather expensive current valuation of LPLA.
The rest of the industry has a similar Price/Earnings ratio as LPLA.
LPLA is valuated rather cheaply when we compare the Price/Earnings ratio to 26.85, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 15.10, the valuation of LPLA can be described as correct.
LPLA's Price/Forward Earnings is on the same level as the industry average.
LPLA is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.44 | ||
| Fwd PE | 15.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LPLA is valued cheaply inside the industry as 85.23% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.88 |
4.3 Compensation for Growth
LPLA's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of LPLA may justify a higher PE ratio.
LPLA's earnings are expected to grow with 20.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.13
PEG (5Y)1.08
EPS Next 2Y18.73%
EPS Next 3Y20.06%
5. Dividend
5.1 Amount
LPLA has a yearly dividend return of 0.34%, which is pretty low.
LPLA's Dividend Yield is slightly below the industry average, which is at 7.67.
With a Dividend Yield of 0.34, LPLA pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
5.2 History
The dividend of LPLA has a limited annual growth rate of 3.76%.
LPLA has paid a dividend for at least 10 years, which is a reliable track record.
LPLA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.76%
Div Incr Years0
Div Non Decr Years11
5.3 Sustainability
8.17% of the earnings are spent on dividend by LPLA. This is a low number and sustainable payout ratio.
The dividend of LPLA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP8.17%
EPS Next 2Y18.73%
EPS Next 3Y20.06%
351.28
-3.73 (-1.05%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners98.99%
Inst Owner Change1.64%
Ins Owners0.39%
Ins Owner Change1.27%
Market Cap28.10B
Analysts80.95
Price Target454.09 (29.27%)
Short Float %2.72%
Short Ratio2.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
Yearly Dividend1.2
Dividend Growth(5Y)3.76%
DP8.17%
Div Incr Years0
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.36%
Min EPS beat(2)4.59%
Max EPS beat(2)8.12%
EPS beat(4)4
Avg EPS beat(4)7.08%
Min EPS beat(4)4.59%
Max EPS beat(4)9.9%
EPS beat(8)8
Avg EPS beat(8)5.48%
EPS beat(12)11
Avg EPS beat(12)4.74%
EPS beat(16)15
Avg EPS beat(16)5.1%
Revenue beat(2)1
Avg Revenue beat(2)0.2%
Min Revenue beat(2)-0.35%
Max Revenue beat(2)0.76%
Revenue beat(4)2
Avg Revenue beat(4)0.61%
Min Revenue beat(4)-0.88%
Max Revenue beat(4)2.92%
Revenue beat(8)4
Avg Revenue beat(8)0.5%
Revenue beat(12)5
Avg Revenue beat(12)0.05%
Revenue beat(16)9
Avg Revenue beat(16)2.18%
PT rev (1m)4.79%
PT rev (3m)14.1%
EPS NQ rev (1m)-1.9%
EPS NQ rev (3m)-10.65%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.41%
Revenue NQ rev (1m)3.41%
Revenue NQ rev (3m)2.26%
Revenue NY rev (1m)0.39%
Revenue NY rev (3m)3.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.44 | ||
| Fwd PE | 15.1 | ||
| P/S | 1.99 | ||
| P/FCF | N/A | ||
| P/OCF | 49.84 | ||
| P/B | 5.54 | ||
| P/tB | 23.03 | ||
| EV/EBITDA | 11.88 |
EPS(TTM)18.07
EY5.14%
EPS(NY)23.26
Fwd EY6.62%
FCF(TTM)-0.07
FCFYN/A
OCF(TTM)7.05
OCFY2.01%
SpS176.62
BVpS63.45
TBVpS15.25
PEG (NY)1.13
PEG (5Y)1.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.4% | ||
| ROE | 22.03% | ||
| ROCE | 13.96% | ||
| ROIC | 10.46% | ||
| ROICexc | 17.77% | ||
| ROICexgc | 49.87% | ||
| OM | 13.92% | ||
| PM (TTM) | 7.91% | ||
| GM | 98.93% | ||
| FCFM | N/A |
ROA(3y)9.04%
ROA(5y)8.01%
ROE(3y)42.14%
ROE(5y)37.98%
ROIC(3y)15.44%
ROIC(5y)14.04%
ROICexc(3y)25.8%
ROICexc(5y)23.26%
ROICexgc(3y)599.08%
ROICexgc(5y)438.7%
ROCE(3y)20.61%
ROCE(5y)18.75%
ROICexcg growth 3Y-20.71%
ROICexcg growth 5Y-23.61%
ROICexc growth 3Y-1.8%
ROICexc growth 5Y-7.03%
OM growth 3Y10.2%
OM growth 5Y-2.12%
PM growth 3Y12.79%
PM growth 5Y-3%
GM growth 3Y0.03%
GM growth 5Y0.02%
F-Score3
Asset Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.93 | ||
| Cap/Depr | 108.67% | ||
| Cap/Sales | 4.03% | ||
| Interest Coverage | 6.36 | ||
| Cash Conversion | 22.64% | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.05 | ||
| Quick Ratio | 3.05 | ||
| Altman-Z | 3.47 |
F-Score3
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)115.77%
Cap/Depr(5y)105.75%
Cap/Sales(3y)4.04%
Cap/Sales(5y)3.51%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.8%
EPS 3Y32.96%
EPS 5Y18.07%
EPS Q2Q%16.24%
EPS Next Y17.17%
EPS Next 2Y18.73%
EPS Next 3Y20.06%
EPS Next 5Y10.6%
Revenue 1Y (TTM)29.23%
Revenue growth 3Y17.06%
Revenue growth 5Y17.1%
Sales Q2Q%30.81%
Revenue Next Year27.96%
Revenue Next 2Y22.15%
Revenue Next 3Y18.23%
Revenue Next 5Y8.27%
EBIT growth 1Y24.53%
EBIT growth 3Y29%
EBIT growth 5Y14.62%
EBIT Next Year9.69%
EBIT Next 3Y26.54%
EBIT Next 5Y13.75%
FCF growth 1Y-100.3%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-73.72%
OCF growth 3Y-15.07%
OCF growth 5Y-14.95%