Allstate Stock in Brief

Today we're going to take a closer look at large-cap Finance company Allstate, whose shares are currently trading at $143.09. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

Allstate's P/B and P/E Ratios Are Higher Than Average:

The Allstate Corporation, together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 12.38 and an average price to book (P/B) ratio of 1.58. In contrast, Allstate has a trailing 12 month P/E ratio of -17.9 and a P/B ratio of 2.98.

When we divide Allstate's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -0.61. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.

The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:

2018 2019 2020 2021 2022 2023
Revenue (MM) $39,815 $41,541 $41,909 $50,588 $51,412 $55,909
Revenue Growth n/a 4.34% 0.89% 20.71% 1.63% 8.75%
Interest Income (MM) $332 $327 $318 $330 $335 $356
Net Margins 5% 12% 13% 10% 0% 0%
Net Income (MM) $2,160 $4,847 $5,576 $5,192 -$53 -$42
Depreciation & Amort. (MM) $511 $647 $686 $1,086 $847 $740
Earnings Per Share $5.7 $14.03 $17.31 $4.96 -$5.22 -$7.93
EPS Growth n/a 146.14% 23.38% -71.35% -205.24% -51.92%
Diluted Shares (MM) 353 334 316 299 271 235
Free Cash Flow (MM) $4,898 $4,696 $5,183 $4,771 $4,701 $3,709
Capital Expenditures (MM) $277 $433 $308 $345 $420 $264
Current Ratio 2.91 40.94 99.29 62.61 70.36 72.22
Total Debt (MM) $82,817 $84,153 $87,196 $64,904 $80,410 $86,498

Allstate's financial statements include several red flags such as weak operating margins with a unknown rate of growth, declining EPS growth, and irregular cash flows. Additionally, the firm has high levels of debt. On the other hand, the company has growing revenues and a flat capital expenditure trend working in its favor.

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.