BERKSHIRE HATHAWAY INC-CL A (BRK.A) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRK.A - US0846701086 - Common Stock
726420 USD
+5488 (+0.76%)
727000 USD
+580 (+0.08%)
We assign a fundamental rating of 4 out of 10 to BRK.A. BRK.A was compared to 97 industry peers in the Financial Services industry. BRK.A has an average financial health and profitability rating. While showing a medium growth rate, BRK.A is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year BRK.A was profitable.
- In the past year BRK.A had a positive cash flow from operations.
- Of the past 5 years BRK.A 4 years were profitable.
- BRK.A had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- BRK.A has a Return On Assets of 5.50%. This is in the better half of the industry: BRK.A outperforms 77.32% of its industry peers.
- BRK.A has a Return On Equity of 9.66%. This is comparable to the rest of the industry: BRK.A outperforms 54.64% of its industry peers.
- The Return On Invested Capital of BRK.A (4.53%) is better than 63.92% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for BRK.A is below the industry average of 8.46%.
- The 3 year average ROIC (4.13%) for BRK.A is below the current ROIC(4.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 9.66% | ||
| ROIC | 4.53% |
ROA(3y)4.77%
ROA(5y)5.71%
ROE(3y)8.68%
ROE(5y)10.68%
ROIC(3y)4.13%
ROIC(5y)3.72%
1.3 Margins
- BRK.A's Profit Margin of 18.13% is fine compared to the rest of the industry. BRK.A outperforms 70.10% of its industry peers.
- In the last couple of years the Profit Margin of BRK.A has declined.
- BRK.A has a better Operating Margin (16.72%) than 60.82% of its industry peers.
- In the last couple of years the Operating Margin of BRK.A has grown nicely.
- Looking at the Gross Margin, with a value of 17.71%, BRK.A is doing worse than 62.89% of the companies in the same industry.
- BRK.A's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.72% | ||
| PM (TTM) | 18.13% | ||
| GM | 17.71% |
OM growth 3Y7.37%
OM growth 5Y4.91%
PM growth 3Y-9.72%
PM growth 5Y-5.61%
GM growth 3Y3.45%
GM growth 5Y2.09%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so BRK.A is destroying value.
- Compared to 1 year ago, BRK.A has less shares outstanding
- Compared to 5 years ago, BRK.A has less shares outstanding
- Compared to 1 year ago, BRK.A has an improved debt to assets ratio.
2.2 Solvency
- BRK.A has an Altman-Z score of 2.55. This is not the best score and indicates that BRK.A is in the grey zone with still only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.55, BRK.A belongs to the top of the industry, outperforming 81.44% of the companies in the same industry.
- BRK.A has a debt to FCF ratio of 6.58. This is a slightly negative value and a sign of low solvency as BRK.A would need 6.58 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 6.58, BRK.A is in line with its industry, outperforming 55.67% of the companies in the same industry.
- A Debt/Equity ratio of 0.18 indicates that BRK.A is not too dependend on debt financing.
- With a decent Debt to Equity ratio value of 0.18, BRK.A is doing good in the industry, outperforming 63.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.18 | ||
| Debt/FCF | 6.58 | ||
| Altman-Z | 2.55 |
ROIC/WACC0.55
WACC8.26%
2.3 Liquidity
- BRK.A has a Current Ratio of 1.33. This is a normal value and indicates that BRK.A is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.33, BRK.A is in the better half of the industry, outperforming 61.86% of the companies in the same industry.
- A Quick Ratio of 1.11 indicates that BRK.A should not have too much problems paying its short term obligations.
- BRK.A has a Quick ratio (1.11) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 17.97% over the past year.
- BRK.A shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.78% yearly.
- The Revenue has been growing slightly by 0.60% in the past year.
- Measured over the past years, BRK.A shows a small growth in Revenue. The Revenue has been growing by 7.84% on average per year.
EPS 1Y (TTM)17.97%
EPS 3Y21.97%
EPS 5Y17.78%
EPS Q2Q%33.51%
Revenue 1Y (TTM)0.6%
Revenue growth 3Y10.38%
Revenue growth 5Y7.84%
Sales Q2Q%2.13%
3.2 Future
- Based on estimates for the next years, BRK.A will show a small growth in Earnings Per Share. The EPS will grow by 2.26% on average per year.
- Based on estimates for the next years, BRK.A will show a small growth in Revenue. The Revenue will grow by 4.89% on average per year.
EPS Next Y-0.33%
EPS Next 2Y0.31%
EPS Next 3Y1.09%
EPS Next 5Y2.26%
Revenue Next Year0.8%
Revenue Next 2Y0.25%
Revenue Next 3Y1.4%
Revenue Next 5Y4.89%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 21.40, BRK.A is valued on the expensive side.
- BRK.A's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of BRK.A to the average of the S&P500 Index (27.25), we can say BRK.A is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 21.88, BRK.A is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of BRK.A indicates a slightly more expensive valuation: BRK.A is more expensive than 62.89% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of BRK.A to the average of the S&P500 Index (25.98), we can say BRK.A is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.4 | ||
| Fwd PE | 21.88 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BRK.A is on the same level as its industry peers.
- Based on the Price/Free Cash Flow ratio, BRK.A is valued a bit more expensive than the industry average as 61.86% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.13 | ||
| EV/EBITDA | 14.5 |
4.3 Compensation for Growth
- BRK.A has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.2
EPS Next 2Y0.31%
EPS Next 3Y1.09%
5. Dividend
5.1 Amount
- BRK.A does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
BERKSHIRE HATHAWAY INC-CL A / BRK.A FAQ
What is the ChartMill fundamental rating of BERKSHIRE HATHAWAY INC-CL A (BRK.A) stock?
ChartMill assigns a fundamental rating of 4 / 10 to BRK.A.
What is the valuation status of BERKSHIRE HATHAWAY INC-CL A (BRK.A) stock?
ChartMill assigns a valuation rating of 2 / 10 to BERKSHIRE HATHAWAY INC-CL A (BRK.A). This can be considered as Overvalued.
How profitable is BERKSHIRE HATHAWAY INC-CL A (BRK.A) stock?
BERKSHIRE HATHAWAY INC-CL A (BRK.A) has a profitability rating of 6 / 10.
What is the valuation of BERKSHIRE HATHAWAY INC-CL A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for BERKSHIRE HATHAWAY INC-CL A (BRK.A) is 21.4 and the Price/Book (PB) ratio is 1.5.
What is the earnings growth outlook for BERKSHIRE HATHAWAY INC-CL A?
The Earnings per Share (EPS) of BERKSHIRE HATHAWAY INC-CL A (BRK.A) is expected to decline by -0.33% in the next year.