Bank of America Valuation
| BAC Stock | USD 35.95 0.16 0.45% |
At this time, the firm appears to be overvalued. Bank of America shows a prevailing Real Value of $33.77 per share. The current price of the firm is $35.95. Our model approximates the value of Bank of America from analyzing the firm fundamentals such as Current Valuation of 191.78 B, return on equity of 0.0939, and Profit Margin of 0.28 % as well as examining its technical indicators and probability of bankruptcy. In general, most investors favor purchasing undervalued instruments and exiting overvalued instruments since, at some point, asset prices and their ongoing real values will blend. Key fundamental drivers impacting Bank of America's valuation include:
Price Book 1.0728 | Enterprise Value 191.8 B | Price Sales 2.9984 | Forward PE 11.0865 | Trailing PE 11.6721 |
Overvalued
Today
Please note that Bank of America's price fluctuation is very steady at this time. Calculation of the real value of Bank of America is based on 3 months time horizon. Increasing Bank of America's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Bank of America is useful when determining the fair value of the Bank stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Bank of America. Since Bank of America is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Bank Stock. However, Bank of America's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. | Historical | Market 35.95 | Real 33.77 | Target 32.07 | Hype 36.02 |
The real value of Bank Stock, also known as its intrinsic value, is the underlying worth of Bank of America Company, which is reflected in its stock price. It is based on Bank of America's financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Bank of America's stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Bank of America's stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of Bank of America helps investors to forecast how Bank stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Bank of America more accurately as focusing exclusively on Bank of America's fundamentals will not take into account other important factors: Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Bank of America's intrinsic value based on its ongoing forecasts of Bank of America's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Bank of America's closest peers. When choosing an evaluation method for Bank of America, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.
Bank of America Investments |
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Bank Valuation Trend
Knowing Bank of America's actual value is paramount for traders to make sound investment determinations. Bank of America's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Bank of America's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Bank of America's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.
Bank Market Cap
Bank of America is rated second in market capitalization category among related companies. Market capitalization of Financials industry is currently estimated at about 1.74 Trillion. Bank of America retains roughly 283.67 Billion in market capitalization claiming about 16% of equities under Financials industry.Bank of America Valuation Ratios as Compared to Competition
Comparative valuation techniques use various fundamental indicators to help in determining Bank of America's current stock value. Our valuation model uses many indicators to compare Bank of America value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Bank of America competition to find correlations between indicators driving Bank of America's intrinsic value. More Info.Bank of America is rated below average in price to earning category among related companies. It is rated below average in price to book category among related companies fabricating about 0.09 of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for Bank of America is roughly 10.92 . The current year's Price To Book Ratio is expected to grow to 1.53. Comparative valuation analysis is a catch-all model that can be used if you cannot value Bank of America by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Bank of America's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Bank of America's earnings, one of the primary drivers of an investment's value.Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Bank of America's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Bank of America and how it compares across the competition.
About Bank of America Valuation
The stock valuation mechanism determines the current worth of Bank of America on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Bank of America. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Bank of America based exclusively on its fundamental and basic technical indicators. By analyzing Bank of America's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Bank of America's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Bank of America. We calculate exposure to Bank of America's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Bank of America's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 94.2 B | 64.8 B | |
| Pretax Profit Margin | 0.29 | 0.31 | |
| Operating Profit Margin | 0.29 | 0.31 | |
| Net Profit Margin | 0.27 | 0.16 | |
| Gross Profit Margin | 0.96 | 1.09 |
Bank of America Quarterly Retained Earnings |
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8 Steps to conduct Bank of America's Valuation Analysis
Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Bank of America's potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Bank of America's valuation analysis, follow these 8 steps:- Gather financial information: Obtain Bank of America's financial statements, including balance sheets, income statements, and cash flow statements.
- Determine Bank of America's revenue streams: Identify Bank of America's primary sources of revenue, including products or services offered, target markets, and pricing strategies.
- Analyze market data: Research Bank of America's industry and market trends, including the size of the market, growth rate, and competition.
- Establish Bank of America's growth potential: Evaluate Bank of America's management, business model, and growth potential.
- Determine Bank of America's financial performance: Analyze its financial statements to assess its historical performance and future potential.
- Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
- Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Bank of America's estimated value.
- Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
A single share of Bank of America represents a small ownership stake in the entity. As a stockholder of Bank, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
Bank of America Dividends Analysis For Valuation
At present, Bank of America's Dividend Payout Ratio is projected to slightly decrease based on the last few years of reporting. . At present, Bank of America's Retained Earnings Total Equity is projected to increase significantly based on the last few years of reporting. The current year's Price Earnings Ratio is expected to grow to 11.05, whereas Earning Assets are forecasted to decline to about 1.2 T.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | -9.1 B | -8.6 B | |
| Dividend Yield | 0.03 | 0.04 | |
| Dividend Payout Ratio | 0.34 | 0.51 | |
| Dividend Paid And Capex Coverage Ratio | 4.95 | 4.70 |
There are various types of dividends Bank of America can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Bank shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Bank of America directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Bank pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Bank of America by the value of the dividends paid out.
Bank of America Growth Indicators
Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Bank of America does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
| Common Stock Shares Outstanding | 8.1 B | |
| Quarterly Earnings Growth Y O Y | -0.607 | |
| Forward Price Earnings | 11.0865 |
Bank of America Current Valuation Indicators
Valuation refers to the process of determining the present value of Bank of America and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Bank we look at many different elements of the entity such as Bank's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Bank of America's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Bank of America's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Bank of America, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Bank of America's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Bank of America's worth.When determining whether Bank of America offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Bank of America's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Bank Of America Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Bank Of America Stock: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Bank of America. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in nation. For information on how to trade Bank Stock refer to our How to Trade Bank Stock guide.Note that the Bank of America information on this page should be used as a complementary analysis to other Bank of America's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Complementary Tools for Bank Stock analysis
When running Bank of America's price analysis, check to measure Bank of America's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Bank of America is operating at the current time. Most of Bank of America's value examination focuses on studying past and present price action to predict the probability of Bank of America's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Bank of America's price. Additionally, you may evaluate how the addition of Bank of America to your portfolios can decrease your overall portfolio volatility.
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Is Bank of America's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Bank of America. If investors know Bank will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Bank of America listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.61) | Dividend Share 0.92 | Earnings Share 3.08 | Revenue Per Share 11.731 | Quarterly Revenue Growth (0.11) |
The market value of Bank of America is measured differently than its book value, which is the value of Bank that is recorded on the company's balance sheet. Investors also form their own opinion of Bank of America's value that differs from its market value or its book value, called intrinsic value, which is Bank of America's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Bank of America's market value can be influenced by many factors that don't directly affect Bank of America's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Bank of America's value and its price as these two are different measures arrived at by different means. Investors typically determine if Bank of America is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Bank of America's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.