NasdaqGS:ETFC

Stock Analysis Report

Executive Summary

E*TRADE Financial Corporation, a financial services company, provides brokerage, and related products and services for traders, investors, registered investment advisors (RIAs), and stock plan administrators and participants.


Snowflake Analysis

Undervalued with questionable track record.


Similar Companies

Share Price & News

How has E*TRADE Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ETFC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

24.6%

ETFC

19.7%

US Capital Markets

12.5%

US Market


1 Year Return

-29.2%

ETFC

-13.2%

US Capital Markets

-12.7%

US Market

Return vs Industry: ETFC underperformed the US Capital Markets industry which returned -13.2% over the past year.

Return vs Market: ETFC underperformed the US Market which returned -12.7% over the past year.


Shareholder returns

ETFCIndustryMarket
7 Day24.6%19.7%12.5%
30 Day-25.8%-16.9%-14.7%
90 Day-25.1%-23.7%-21.5%
1 Year-28.3%-29.2%-11.5%-13.2%-10.9%-12.7%
3 Year-0.5%-2.2%6.8%0.7%12.6%5.4%
5 Year23.3%21.1%32.7%20.3%31.9%17.5%

Price Volatility Vs. Market

How volatile is E*TRADE Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is E*TRADE Financial undervalued compared to its fair value and its price relative to the market?

47.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ETFC ($33.98) is trading below our estimate of fair value ($65.02)

Significantly Below Fair Value: ETFC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ETFC is good value based on its PE Ratio (8.8x) compared to the Capital Markets industry average (32.5x).

PE vs Market: ETFC is good value based on its PE Ratio (8.8x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: ETFC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ETFC is good value based on its PB Ratio (1.3x) compared to the US Capital Markets industry average (7.2x).


Next Steps

Future Growth

How is E*TRADE Financial forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

-10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ETFC's earnings are forecast to decline over the next 3 years (-10.1% per year).

Earnings vs Market: ETFC's earnings are forecast to decline over the next 3 years (-10.1% per year).

High Growth Earnings: ETFC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ETFC's revenue is expected to decline over the next 3 years (-3.7% per year).

High Growth Revenue: ETFC's revenue is forecast to decline over the next 3 years (-3.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ETFC's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has E*TRADE Financial performed over the past 5 years?

28.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ETFC has high quality earnings.

Growing Profit Margin: ETFC's current net profit margins (31.2%) are lower than last year (34.3%).


Past Earnings Growth Analysis

Earnings Trend: ETFC's earnings have grown significantly by 28.4% per year over the past 5 years.

Accelerating Growth: ETFC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ETFC had negative earnings growth (-9.9%) over the past year, making it difficult to compare to the Capital Markets industry average (9.7%).


Return on Equity

High ROE: ETFC's Return on Equity (14.6%) is considered low.


Next Steps

Financial Health

How is E*TRADE Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ETFC has a low level of unsold assets or inventory.

Debt Coverage by Assets: ETFC's debt is covered by short term assets (assets are 6.9x debt).


Financial Institutions Analysis

Asset Level: ETFC's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if ETFC has a sufficient allowance for bad loans.

Low Risk Liabilities: ETFC reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if ETFC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ETFC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if ETFC has an appropriate level of bad loans.


Next Steps

Dividend

What is E*TRADE Financial's current dividend yield, its reliability and sustainability?

1.65%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ETFC's dividend (1.65%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: ETFC's dividend (1.65%) is low compared to the top 25% of dividend payers in the US market (5.49%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether ETFC's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if ETFC's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (14.5%), ETFC's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ETFC's dividends in 3 years are forecast to be well covered by earnings (28.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure


CEO

Mike Pizzi (44yo)

0.58

Tenure

US$6,012,990

Compensation

Mr. Michael A. Pizzi, also known as Mike, serves as President and Director at E*TRADE Bank since August 15, 2019. Mr. Pizzi serves as Chief Executive Officer and Director at E*TRADE Financial Corporation s ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD6.01M) is about average for companies of similar size in the US market ($USD7.36M).

Compensation vs Earnings: Mike's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Pizzi
CEO & Director0.58yrUS$6.01m0.086% $6.4m
Chad Turner
Executive VP & CFO1.25yrsUS$2.06m0.025% $1.9m
Lori Sher
Executive VP3.5yrsUS$2.44m0.028% $2.1m
Michael Curcio
Executive Vice President of Institutional15.17yrsUS$3.75m0.053% $4.0m
Alice Milligan
Executive VP & Chief Customer Officer0.83yrUS$3.55mno data
Dirk Wyckoff
Corporate Controller & Principal Accounting Officer0.17yrno data0.0071% $528.6k
Matthew Minetola
Chief Information Officer0.67yrno data0.0024% $178.7k
Brett Goodman
Chief Business Development Officer11.67yrsno datano data
Andrea Zaretsky
Chief Marketing Officer1.17yrsno datano data
Mayank Gupta
Chief Human Resources Officer1.17yrsno datano data

1.2yrs

Average Tenure

47yo

Average Age

Experienced Management: ETFC's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Michael Pizzi
CEO & Director0.58yrUS$6.01m0.086% $6.4m
Donna Weaver
Independent Director16.92yrsUS$295.28k0.023% $1.7m
James Lam
Independent Director7.33yrsUS$276.35k0.013% $960.5k
Kevin Kabat
Lead Independent Director3.5yrsUS$307.92k0.0073% $545.8k
Richard Carbone
Independent Director6.58yrsUS$293.21k0.0011% $84.1k
Rodger Lawson
Chairman of the Board6.83yrsUS$544.64k0.039% $2.9m
James Healy
Independent Director5.17yrsUS$277.14k0.011% $837.6k
Joshua Weinreich
Independent Director1.58yrsUS$251.51k0.0045% $338.0k
Rebecca Saeger
Independent Director8yrsUS$286.35k0.014% $1.1m
Shelley Leibowitz
Independent Director5.25yrsUS$257.51k0.0044% $331.3k

5.9yrs

Average Tenure

62.5yo

Average Age

Experienced Board: ETFC's board of directors are considered experienced (5.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

E*TRADE Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: E*TRADE Financial Corporation
  • Ticker: ETFC
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: US$7.446b
  • Shares outstanding: 219.12m
  • Website: https://about.etrade.com

Number of Employees


Location

  • E*TRADE Financial Corporation
  • Ballston Tower
  • 671 North Glebe Road
  • Arlington
  • Virginia
  • 22203
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ETFCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1996
ETRADB (Deutsche Boerse AG)YesCommon StockDEEURAug 1996
ETFC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 1996
0IEOLSE (London Stock Exchange)YesCommon StockGBUSDAug 1996
ETRABRSE (Berne Stock Exchange)YesCommon StockCHCHFAug 1996
A185D9DB (Deutsche Boerse AG)5.875%-FRN PERP USDDEUSDAug 2016
E1TF34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

E*TRADE Financial Corporation, a financial services company, provides brokerage, and related products and services for traders, investors, registered investment advisors (RIAs), and stock plan administrators and participants. It offers investor-focused banking products, including sweep deposit accounts; automated trade order placement and execution services; clearing and settlement services; and insurance on qualifying amounts of customer deposits, and other banking and cash management services. The company also provides custody solutions to RIAs; software and services for managing equity compensation plans, student loans, and financial wellness solutions to corporate clients; retail futures transaction services; and investment advisory services. It provides its services through digital platforms; and a network of industry-licensed customer service representatives and financial consultants through phone, email, and online at two national financial centers, as well as in-person at 30 regional financial centers in the United States. E*TRADE Financial Corporation has a strategic alliance with Empower Retirement to deliver an integrated stock plan and retirement benefits experience. The company was founded in 1982 and is headquartered in Arlington, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 00:34
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.