Lpl Financial Holdings Inc.

LPLA

Security & Commodity Brokers, Dealers, Exchanges & Services

Mkt Cap

$21.11B

PE

20.77

Debt

$3.854B

Cash

$2.827B

EV

$22.13B

FCF

$721.4M

Market Cap

$21.11B

P/E Ratio

20.77

Debt

$3.854B

Cash

$2.827B

EV

$22.13B

FCF

$721.4M

Charts data: {"Earnings":[{"time":"2014-12-30","value":178043000},{"time":"2015-12-30","value":168784000},{"time":"2016-12-30","value":191931000},{"time":"2017-12-30","value":238863000},{"time":"2018-12-30","value":439459000},{"time":"2019-12-30","value":559880000},{"time":"2020-12-30","value":472640000},{"time":"2021-12-30","value":459866000},{"time":"2022-12-30","value":845702000},{"time":"2023-12-30","value":1066250000}],"Sales":[{"time":"2014-12-30","value":4373662000},{"time":"2015-12-30","value":4275054000},{"time":"2016-12-30","value":4049383000},{"time":"2017-12-30","value":4281481000},{"time":"2018-12-30","value":5188400000},{"time":"2019-12-30","value":5624856000},{"time":"2020-12-30","value":5871640000},{"time":"2021-12-30","value":7720830000},{"time":"2022-12-30","value":8600825000},{"time":"2023-12-30","value":10052848000}],"Net Margins":[{"time":"2014-12-30","value":0.040707992524342304},{"time":"2015-12-30","value":0.03948113871777994},{"time":"2016-12-30","value":0.04739759118858355},{"time":"2017-12-30","value":0.05578980731200255},{"time":"2018-12-30","value":0.08470029296122118},{"time":"2019-12-30","value":0.09953677036354353},{"time":"2020-12-30","value":0.08049539821923687},{"time":"2021-12-30","value":0.05956173105741222},{"time":"2022-12-30","value":0.09832800923167254},{"time":"2023-12-30","value":0.10606447048637362}],"Assets":[{"time":"2014-12-30","value":4050993000},{"time":"2015-12-30","value":4521061000},{"time":"2016-12-30","value":4834926000},{"time":"2017-12-30","value":5358751000},{"time":"2018-12-30","value":5477468000},{"time":"2019-12-30","value":5880238000},{"time":"2020-12-30","value":6523571000},{"time":"2021-12-30","value":7991600000},{"time":"2022-12-30","value":9482226000},{"time":"2023-12-30","value":10385480000}],"Stockholders Equity":[{"time":"2014-12-30","value":971600000},{"time":"2015-12-30","value":715610000},{"time":"2016-12-30","value":820995000},{"time":"2017-12-30","value":965008000},{"time":"2018-12-30","value":974073000},{"time":"2019-12-30","value":1023873000},{"time":"2020-12-30","value":1314854000},{"time":"2021-12-30","value":1670533000},{"time":"2022-12-30","value":2167552000},{"time":"2023-12-30","value":2078979000}],"ROE":[{"time":"2014-12-30","value":0.18324722107863317},{"time":"2015-12-30","value":0.23586031497603444},{"time":"2016-12-30","value":0.2337785248387627},{"time":"2017-12-30","value":0.24752437285494006},{"time":"2018-12-30","value":0.45115612484895895},{"time":"2019-12-30","value":0.5468256316945559},{"time":"2020-12-30","value":0.3594619630772694},{"time":"2021-12-30","value":0.2752810031289415},{"time":"2022-12-30","value":0.39016457275304123},{"time":"2023-12-30","value":0.5128719433914436}],"ROA":[{"time":"2014-12-30","value":0.0727468549069327},{"time":"2015-12-30","value":0.06249749782186084},{"time":"2016-12-30","value":0.061534757719146065},{"time":"2017-12-30","value":0.06803264417398756},{"time":"2018-12-30","value":0.10819542898288041},{"time":"2019-12-30","value":0.1261573085987336},{"time":"2020-12-30","value":0.09597090305294446},{"time":"2021-12-30","value":0.07524513238900846},{"time":"2022-12-30","value":0.11723544661348506},{"time":"2023-12-30","value":0.13911489887804898}]}

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and auction rate notes. The company also provides advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market products; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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9/30/22
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6/30/22
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3/31/22
10-K
12/31/21
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9/30/21
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3/31/21
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12/31/20
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3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Lpl Financial Holdings Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$721.4M	$870.8M	$1.036B	$1.214B	$1.402B	$1.595B	$1.786B	$1.969B	$2.136B	$2.28B	$2.394B	$23.94B
DCF		$757.2M	$783.3M	$798.5M	$801.8M	$792.9M	$772.1M	$740.1M	$698.2M	$648.1M	$591.8M	$5.918B
Value	$13.3B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 24%

Earnings Stability 88%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	3.9%	4.7%	5.6%	8.5%	10%	8%	6%	9.8%	11%	9.7%
ROA	6.2%	6.2%	6.8%	11%	13%	9.6%	7.5%	12%	14%	12%
ROE	24%	23%	25%	45%	55%	36%	28%	39%	51%	45%

What is the average Net Margin?

The average Net Margin over the past 5 years is +8.81%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.24%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +11.03%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.31%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +42.26%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.7%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	10.71	14.93	7.22	5.30	5.17	3.72	11.97	1.67	34.37	5.34
Debt Equity	3.10	2.68	2.48	2.44	2.36	1.79	1.70	1.26	1.81	1.70
MIN
Graham Stability	-	-	100%	100%	100%	100%	94%	100%	100%	94%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.34.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 4.09.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.94.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	14%	14%	20%	17%	2.7%
Net Income	28%	19%	31%	26%	3%
Stockholders Equity	14%	16%	16%	-4.1%	3%
FCF	-4.2%	-25%	-44%	-93%	16%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +14.14%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.69%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +19.4%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +3.03%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +16.37%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +3.01%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -24.61%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +15.51%.