Now trading at a price of $222.17, LPL Financial has moved 1.7% so far today.
LPL Financial returned gains of 2092.6% last year, with its stock price reaching a high of $271.56 and a low of $169.68. Over the same period, the stock outperformed the S&P 500 index by 698.0%. More recently, the company's 50-day average price was $201.34. LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Based in San Diego, CA, the large-cap Finance company has 7,124 full time employees. LPL Financial has offered a 0.5% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $2,042 | $1,998 | $2,350 | $3,064 |
| Interest Income (MM) | -$83 | -$76 | -$76 | -$49 |
| Net Margins | 27.42% | 23.66% | 19.57% | 27.6% |
| Net Income (MM) | $560 | $473 | $460 | $846 |
| Depreciation & Amort. (MM) | -$161 | -$177 | -$231 | -$287 |
| Earnings Per Share | $6.62 | $5.86 | $5.63 | $13.08 |
| EPS Growth | n/a | -11.48% | -3.92% | 132.33% |
| Diluted Shares (MM) | 85 | 81 | 82 | 78 |
| Free Cash Flow (MM) | $467 | $634 | $237 | $1,639 |
| Capital Expenditures (MM) | -$156 | -$156 | -$216 | -$307 |
| Long Term Debt (MM) | $2,399 | $2,345 | $2,814 | $2,717 |
| Net Debt / EBITDA | 1.88 | 1.75 | 2.65 | 1.29 |
LPL Financial benefits from growing revenues and increasing reinvestment in the business, strong net margins with a stable trend, and low leverage. The company's financial statements show a strong EPS growth trend and generally positive cash flows.
LPL Financial's Valuation Is in Line With Its Sector Averages:
LPL Financial has a trailing twelve month P/E ratio of 15.4, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of $18.18, the company has a forward P/E ratio of 11.1. According to the 22.4% compound average growth rate of LPL Financial's historical and projected earnings per share, the company's PEG ratio is 0.69. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.4%. On this basis, the company's PEG ratio is 1.48. This implies that the shares are fairly valued. In contrast, LPL Financial is likely overvalued compared to the book value of its equity, since its P/B ratio of 7.94 is higher than the sector average of 1.57. The company's shares are currently trading 217.0% above their Graham number. Ultimately, LPL Financial's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
LPL Financial Has an Average Rating of Buy:
The 9 analysts following LPL Financial have set target prices ranging from $202.0 to $290.0 per share, for an average of $240.22 with a buy rating. As of April 2023, the company is trading -16.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.
LPL Financial has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 98.8% of the company's shares, and the insider ownership rate stands at 0.6%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 10% stake in the company is worth $1,763,591,666.
