We've been asking ourselves recently if the market has placed a fair valuation on Lazard LTD. Lazard LTD. Let's dive into some of the fundamental values of this mid-cap Finance company to determine if there might be an opportunity here for value-minded investors.
Lazard Ltd, together with its subsidiaries, operates as a financial advisory and asset management firm in North America, Europe, Asia, Australia, and Central and South America. It operates in two segments, Financial Advisory and Asset Management. The Financial Advisory segment offers various financial advisory services regarding mergers and acquisitions, restructurings, capital advisory, shareholder advisory, capital raising, sovereign advisory, and other strategic advisory matters. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 14.34 and an average price to book (P/B) ratio of 1.57. In contrast, Lazard LTD. Lazard LTD. has a trailing 12 month P/E ratio of 13.1 and a P/B ratio of 5.51.
P/B ratios are calculated by dividing the company's market value by its equity's book value. Equity refers to all of the company's assets minus its liabilities. Traditionally, a P/B ratio of around 1 shows that a company is fairly valued, but owing to consistently higher valuations in the modern era, investors generally compare against sector averages.
Lazard LTD. Lazard LTD.'s PEG ratio is 3.0, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
