LPL Financial may be overvalued, but owing to its strong growth indicators, the 11 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $220.0 to $290.0 per share, for an average of $265.91. At today's price of $206.35, LPL Financial is trading -22.4% away from its average target price, suggesting there is an analyst consensus of strong upside potential.
LPL Financial Holdings Inc., provides an integrated platform of brokerage and investment advisory services to independent financial advisers and financial advisers at financial institutions in the United States. The large-cap Finance company is based in San Diego, CA. LPL Financial has offered a 0.61% dividend yield over the last 12 months.
LPL Financial has a trailing twelve month P/E ratio of 19.84, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of 20.08, the company has a forward P/E ratio of 10.28. Based on the 38.4% average annual growth rate of LPL Financial's historical and projected earnings per share, the company's PEG ratio is 0.52. This EPS growth rate is likely not sustainable, so will substitute the broader market's 5-year projected EPS growth rate of 13.05%, which gives us a PEG ratio of 1.52. This suggests that these shares are overvalued.
Furthermore, LPL Financial is likely overvalued compared to its book value, since its P/B ratio of 8.54 is higher than the sector average of 1.57. The company's shares are currently trading 216.93% above their Graham number, implying that they are overvalued in terms of earnings and book value.
If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows. They might also believe that LPL Financial's positive margin growth trend will continue.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $5,625 | $5,872 | $7,721 | $8,601 |
| Revenue Growth | n/a | 4.39% | 31.49% | 11.4% |
| Operating Margins | -3.38% | -6.78% | 74.16% | 73.61% |
| Operating Margins Growth | n/a | -100.59% | 1193.81% | -0.74% |
| Earnings Per Share | $6.98 | $5.96 | $5.74 | $10.64 |
| EPS Growth | n/a | -14.61% | -3.69% | 85.37% |
| Diluted Shares (MM) | 80 | 79 | 80 | 79 |
| Free Cash Flow (MM) | $467 | $634 | $237 | $1,639 |
| FCF Growth | n/a | 35.71% | -62.62% | 591.12% |
| Capital Expenditures (MM) | $156 | $156 | $216 | $307 |
| LT Debt to Equity | 2.34 | 1.78 | 1.68 | 1.25 |
