(BRK.B) — Fairly Priced With a Low Growth Profile

Berkshire Hathaway shares moved -11.2% over the last 52 weeks, with a high of $354.33 and a low of $259.85. During this time, the stock lagged the S&P 500 index by -4.0%. As of April 2023, the company's 50-day average price is $306.65. Berkshire Hathaway Inc., through its subsidiaries, engages in the insurance, freight rail transportation, and utility businesses worldwide. The Large-Cap Financial Services company has 383,000 full time employees and is based in Omaha, NE. Berkshire Hathaway has not offered any dividends in the last year.

Declining Revenues With a Flat Capital Expenditure Trend:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue $327,223,000 $286,256,000 $354,636,000 $234,190,000
Net Income $81,417,000 $42,521,000 $89,795,000 -$22,819,000
Net Margins 24.88% 14.85% 25.32% -9.74%
Earnings Per Share $33.22 $17.78 $39.64 -$10.44
Diluted Shares 2,450,918 2,391,702 2,265,269 1,298,190
Free Cash Flow $22,708,000 $26,761,000 $26,145,000 $21,760,000
Capital Expenditures -$15,979,000 -$13,012,000 -$13,276,000 -$15,464,000
Long Term Debt $98,682,000 $113,547,000 $111,911,000 $120,315,000
LT Debt to Equity 0.23 0.26 0.22 0.25

Berkshire Hathaway has negative earnings for the current period, so its trailing twelve month P/E ratio is not meaningful. But based on its EPS guidance of 17.79, the company has a forward P/E ratio of 17.6. In contrast, the Financial Services sector's average P/E ratio is 14.34.On the other hand, Berkshire Hathaway is possibly undervalued in terms of its book value because its P/B ratio is 0.0 compared to its sector average of 1.57. In summary, Berkshire Hathaway's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.

Berkshire Hathaway Has a Small Amount of Insider Shareholders:

The only analyst following Berkshire Hathaway has set a target price of $371.0 per share, which is -15.77 away from its current price. This analyst rates the stock as hold. The company has a very low short interest since 0.6% of the company's shares are tied to short positions. Institutions own 66.1% of Berkshire Hathaway's shares, while the insider ownership rate stands at 0.37%. which is a small amount of insider investors. The company's biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth $43,202,224,401.

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.