How Do Value-Focused Investors See SVB Financial (SIVB) Shares?

SVB Financial shares moved -66.6% over the last 52 weeks, with a high of $752.68 and a low of $198.1. During this time, the stock lagged the S&P 500 index by -46.6%. As of January 2022, the company's 50-day average price is $224.0364. SVB Financial Group, a diversified financial services company, offers various banking and financial products and services. The large-cap Financial Services company has 8,429 full time employees and is based in Santa Clara, CA. SVB Financial has not offered any dividends in the last year.

Increasing Revenues but Narrowing Margins:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $3,260 $3,920 $5,917
Revenue Growth n/a 20.26% 50.95%
Net Margins 34.88% 30.83% 30.98%
Net Margins Growth n/a -11.61% 0.49%
Earnings Per Share $21.73 $22.87 $31.25
EPS Growth n/a 5.25% 36.64%
Free Cash Flow (MM) $1,099 $1,358 $1,699
FCF Growth n/a 23.61% 25.1%
Capital Expenditures (MM) -$65 -$87 -$113
LT Debt to Equity 0.06 0.11 0.2

SVB Financial has Attractive P/E and P/B Ratios and Trades Below Its Graham Number:

Compared to the Financial Services sector's average of 13.34, SVB Financial has a trailing twelve month price to earnings (P/E) ratio of 8.7 and, based on its EPS guidance of 21.7, an expected P/E ratio of 10.6.

The firm's price to earnings growth (PEG) is 1.12, which shows that the market is fairly valuing the company in terms of its expected rate of earnings growth.

SVB Financial is undervalued in terms of its assets because its price to book (P/B) ratio is 1.1 compared to its sector average of 1.95. As of the date of publication, the company's shares are trading -33.2% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the forumla:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 26.31 * 200.714) = $344.7

SVB Financial Has an Analyst Consensus of Strong Upside Potential

21 analysts are following SVB Financial and have set target prices ranging from $186 to $600 per share. On average, they have given the company a rating of buy. At the current price of $230.14, SIVB is trading -20.45% away from its average analyst target price of $289.29 per share, implying an analyst consensus of strong upside potential for the stock.

The company has an average amount of shares sold short since 7.4% of the company's shares are tied to short positions. Institutions own 95.6% of SVB Financial's shares, while the insider ownership rate stands at 0.46%. The biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth approximately $1,496,287,195.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.