NASDAQ:LPLA is showing decent growth, but is still valued reasonably.

Last update: Dec 14, 2023

Discover LPL FINANCIAL HOLDINGS INC (NASDAQ:LPLA), an undervalued growth gem identified by our stock screener. NASDAQ:LPLA is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Unpacking NASDAQ:LPLA's Growth Rating

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:LPLA has earned a 7 for growth:

The Earnings Per Share has grown by an impressive 83.02% over the past year.
The Earnings Per Share has been growing by 34.19% on average over the past years. This is a very strong growth
LPLA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.51%.
Measured over the past years, LPLA shows a quite strong growth in Revenue. The Revenue has been growing by 14.97% on average per year.
The Earnings Per Share is expected to grow by 13.75% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.58% on average over the next years. This is quite good.

Looking at the Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:LPLA boasts a 5 out of 10:

The average S&P500 Price/Earnings ratio is at 25.40. LPLA is valued slightly cheaper when compared to this.
LPLA is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.94, which is the current average of the S&P500 Index.
85.22% of the companies in the same industry are more expensive than LPLA, based on the Enterprise Value to EBITDA ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LPLA has an outstanding profitability rating, which may justify a higher PE ratio.
LPLA's earnings are expected to grow with 21.38% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:LPLA

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:LPLA scores a 5 out of 10:

An Altman-Z score of 3.81 indicates that LPLA is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.81, LPLA is in the better half of the industry, outperforming 79.80% of the companies in the same industry.
Looking at the Current ratio, with a value of 1.77, LPLA is in the better half of the industry, outperforming 64.53% of the companies in the same industry.
LPLA has a better Quick ratio (1.77) than 64.53% of its industry peers.

A Closer Look at Profitability for NASDAQ:LPLA

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:LPLA, the assigned 8 is a significant indicator of profitability:

LPLA has a better Return On Assets (12.31%) than 90.64% of its industry peers.
With an excellent Return On Equity value of 55.86%, LPLA belongs to the best of the industry, outperforming 98.52% of the companies in the same industry.
The Return On Invested Capital of LPLA (20.13%) is better than 96.06% of its industry peers.
LPLA had an Average Return On Invested Capital over the past 3 years of 13.63%. This is above the industry average of 9.54%.
The last Return On Invested Capital (20.13%) for LPLA is above the 3 year average (13.63%), which is a sign of increasing profitability.
LPLA's Profit Margin has improved in the last couple of years.
In the last couple of years the Operating Margin of LPLA has grown nicely.
LPLA's Gross Margin of 98.98% is amongst the best of the industry. LPLA outperforms 98.03% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of LPLA contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.