NasdaqGS:ETFC

Stock Analysis Report

Executive Summary

E*TRADE Financial Corporation, a financial services company, operates in the online brokerage industry.


Snowflake Analysis

Good value 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

14.0%

ETFC

-1.5%

US Capital Markets

-1.1%

US Market


1 Year Return

3.3%

ETFC

15.4%

US Capital Markets

17.8%

US Market

Return vs Industry: ETFC underperformed the US Capital Markets industry which returned 15.4% over the past year.

Return vs Market: ETFC underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

ETFCIndustryMarket
7 Day14.0%-1.5%-1.1%
30 Day10.4%1.0%1.5%
90 Day14.6%3.9%6.6%
1 Year4.6%3.3%17.6%15.4%20.2%17.8%
3 Year37.9%35.4%37.5%29.8%47.5%38.1%
5 Year93.7%90.2%78.9%62.4%71.2%52.4%

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?

15.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ETFC ($53.35) is trading below our estimate of fair value ($59.71)

Significantly Below Fair Value: ETFC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ETFC is good value based on its PE Ratio (13.8x) compared to the Capital Markets industry average (33.9x).

PE vs Market: ETFC is good value based on its PE Ratio (13.8x) compared to the US market (18.2x).


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 (2x) compared to the US Capital Markets industry average (6.6x).


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?

-2.9%

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 (-2.9% per year).

Earnings vs Market: ETFC's earnings are forecast to decline over the next 3 years (-2.9% 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 (-1.6% per year).

High Growth Revenue: ETFC's revenue is forecast to decline over the next 3 years (-1.6% 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 (10.9%).


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 (8.4%).


Return on Equity

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


Return on Assets


Return on Capital Employed


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?

1.11%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: ETFC's dividend (1.05%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: ETFC's dividend (1.05%) is low compared to the top 25% of dividend payers in the US market (3.73%).


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 (18.6% payout ratio).


Next Steps

Management

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

1.1yrs

Average management tenure


CEO

Mike Pizzi (44yo)

0.5yrs

Tenure

US$4,723,417

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 ($USD4.72M) is below average for companies of similar size in the US market ($USD10.81M).

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 & Director0.5yrsUS$4.72m0.085% $9.4m
Chad Turner
Executive VP & CFO1.2yrsUS$4.89m0.025% $2.8m
Michael Curcio
Executive Vice President of Institutional15.1yrsUS$4.13m0.054% $6.0m
Dirk Wyckoff
Corporate Controller & Principal Accounting Officer0.08yrsno data0.0071% $781.0k
Matthew Minetola
Chief Information Officer0.6yrsno datano data
Brett Goodman
Chief Business Development Officer11.6yrsno datano data
Lori Sher
Executive VP3.4yrsno data0.028% $3.1m
Andrea Zaretsky
Chief Marketing Officer1.1yrsno datano data
Mayank Gupta
Chief Human Resources Officer1.1yrsno datano data
Michael Kaiser
Chief Of Staff0yrsno datano data

1.1yrs

Average Tenure

45.5yo

Average Age

Experienced Management: ETFC's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Michael Pizzi
CEO & Director0.5yrsUS$4.72m0.085% $9.4m
Donna Weaver
Independent Director16.8yrsUS$287.26k0.022% $2.4m
James Lam
Independent Director7.3yrsUS$281.35k0.013% $1.4m
Kevin Kabat
Lead Independent Director3.4yrsUS$356.45k0.0073% $806.4k
Richard Carbone
Independent Director6.5yrsUS$273.55k0.0011% $123.7k
Rodger Lawson
Chairman of the Board6.8yrsUS$5.02m0.039% $4.3m
James Healy
Independent Director5.1yrsUS$274.15k0.011% $1.2m
Joshua Weinreich
Independent Director1.5yrsUS$115.69k0.0045% $499.3k
Rebecca Saeger
Independent Director8yrsUS$285.27k0.014% $1.6m
Shelley Leibowitz
Independent Director5.2yrsUS$257.52k0.0044% $489.4k

5.8yrs

Average Tenure

62.5yo

Average Age

Experienced Board: ETFC's board of directors are considered experienced (5.8 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$11.046b
  • Shares outstanding: 219.26m
  • Website: https://us.etrade.com

Number of Employees


Location

  • E*TRADE Financial Corporation
  • 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
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, operates in the online brokerage industry. It delivers solutions for traders, investors, advisors, and stock plan administrators and participants. It also offers investor-focused banking products, primarily sweep deposits to customers; clearing and settlement services; insurance on certain qualifying amounts of customer deposits, and other banking and cash management services; custody solutions to RIAs; software and services for managing equity compensation plans to its corporate clients; retail futures transaction services; and investment advisory services. The company provides its services to customers 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 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 Analysis2020/02/24 23:56
End of Day Share Price2020/02/24 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.