Berkshire Hathaway Valuation
| BRK-A Stock | USD 604,500 3,591 0.59% |
At this time, the firm appears to be overvalued. Berkshire Hathaway shows a prevailing Real Value of $548610.0 per share. The current price of the firm is $604500.0. Our model approximates the value of Berkshire Hathaway from analyzing the firm fundamentals such as Return On Equity of 0.18, profit margin of 0.26 %, and Current Valuation of 851.38 B as well as examining its technical indicators and probability of bankruptcy. In general, most investors favor taking in undervalued instruments and trading overvalued instruments since, at some point, asset prices and their ongoing real values will blend. Key fundamental drivers impacting Berkshire Hathaway's valuation include:
Price Book 1.5576 | Enterprise Value 851.4 B | Price Sales 2.3909 | Forward PE 17.9856 | Trailing PE 9.1575 |
Overvalued
Today
Please note that Berkshire Hathaway's price fluctuation is very steady at this time. Calculation of the real value of Berkshire Hathaway is based on 3 months time horizon. Increasing Berkshire Hathaway's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Berkshire Hathaway is useful when determining the fair value of the Berkshire stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Berkshire Hathaway. Since Berkshire Hathaway is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Berkshire Stock. However, Berkshire Hathaway'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 604500.0 | Real 548610.0 | Target 593296.0 | Hype 603986.0 |
The real value of Berkshire Stock, also known as its intrinsic value, is the underlying worth of Berkshire Hathaway Company, which is reflected in its stock price. It is based on Berkshire Hathaway's financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Berkshire Hathaway'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 Berkshire Hathaway'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 Berkshire Hathaway helps investors to forecast how Berkshire 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 Berkshire Hathaway more accurately as focusing exclusively on Berkshire Hathaway'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 Berkshire Hathaway's intrinsic value based on its ongoing forecasts of Berkshire Hathaway's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Berkshire Hathaway's closest peers. When choosing an evaluation method for Berkshire Hathaway, 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.
Berkshire Hathaway Investments |
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Berkshire Valuation Trend
Knowing Berkshire Hathaway's actual value is paramount for traders to make sound investment determinations. Berkshire Hathaway's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Berkshire Hathaway's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Berkshire Hathaway'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.
Berkshire Market Cap
Berkshire Hathaway is number one stock in market capitalization category among related companies. Market capitalization of Financials industry is currently estimated at about 1.05 Trillion. Berkshire Hathaway totals roughly 871.44 Billion in market capitalization claiming about 83% of equities under Financials industry.Berkshire Hathaway Valuation Ratios as Compared to Competition
Comparative valuation techniques use various fundamental indicators to help in determining Berkshire Hathaway's current stock value. Our valuation model uses many indicators to compare Berkshire Hathaway value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Berkshire Hathaway competition to find correlations between indicators driving Berkshire Hathaway's intrinsic value. More Info.Berkshire Hathaway is rated second in price to earning category among related companies. It is rated below average in price to book category among related companies fabricating about 0.03 of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for Berkshire Hathaway is roughly 39.39 . The current year's Price To Book Ratio is expected to grow to 1.67. Comparative valuation analysis is a catch-all model that can be used if you cannot value Berkshire Hathaway by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Berkshire Hathaway'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 Berkshire Hathaway'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 Berkshire Hathaway'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 Berkshire Hathaway and how it compares across the competition.
About Berkshire Hathaway Valuation
The stock valuation mechanism determines the current worth of Berkshire Hathaway on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Berkshire Hathaway. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Berkshire Hathaway based exclusively on its fundamental and basic technical indicators. By analyzing Berkshire Hathaway'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 Berkshire Hathaway'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 Berkshire Hathaway. We calculate exposure to Berkshire Hathaway's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Berkshire Hathaway's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 70.9 B | 103.9 B | |
| Pretax Profit Margin | 0.33 | 0.32 | |
| Operating Profit Margin | 0.13 | 0.07 | |
| Net Profit Margin | 0.26 | 0.14 | |
| Gross Profit Margin | 0.19 | 0.39 |
Berkshire Hathaway Quarterly Retained Earnings |
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8 Steps to conduct Berkshire Hathaway's Valuation Analysis
Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Berkshire Hathaway'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 Berkshire Hathaway's valuation analysis, follow these 8 steps:- Gather financial information: Obtain Berkshire Hathaway's financial statements, including balance sheets, income statements, and cash flow statements.
- Determine Berkshire Hathaway's revenue streams: Identify Berkshire Hathaway's primary sources of revenue, including products or services offered, target markets, and pricing strategies.
- Analyze market data: Research Berkshire Hathaway's industry and market trends, including the size of the market, growth rate, and competition.
- Establish Berkshire Hathaway's growth potential: Evaluate Berkshire Hathaway's management, business model, and growth potential.
- Determine Berkshire Hathaway'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 Berkshire Hathaway's estimated value.
- Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
Berkshire Hathaway 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 Berkshire Hathaway 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 | 1.4 M | |
| Quarterly Earnings Growth Y O Y | 1.108 | |
| Forward Price Earnings | 17.9856 |
Berkshire Hathaway Current Valuation Indicators
Valuation refers to the process of determining the present value of Berkshire Hathaway and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Berkshire we look at many different elements of the entity such as Berkshire's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Berkshire Hathaway'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 Berkshire Hathaway'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 Berkshire Hathaway, 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 Berkshire Hathaway'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 Berkshire Hathaway's worth.Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Berkshire Hathaway. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in board of governors. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Complementary Tools for Berkshire Stock analysis
When running Berkshire Hathaway's price analysis, check to measure Berkshire Hathaway'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 Berkshire Hathaway is operating at the current time. Most of Berkshire Hathaway's value examination focuses on studying past and present price action to predict the probability of Berkshire Hathaway's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Berkshire Hathaway's price. Additionally, you may evaluate how the addition of Berkshire Hathaway to your portfolios can decrease your overall portfolio volatility.
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