NasdaqGS:LPLA

Stock Analysis Report

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Executive Summary

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 financial institutions in the United States. More Details


Snowflake Analysis

Fair value with mediocre balance sheet.


Similar Companies

Share Price & News

How has LPL Financial Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LPLA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: LPLA's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

0.8%

LPLA

1.2%

US Capital Markets

-0.06%

US Market


1 Year Return

0.4%

LPLA

9.0%

US Capital Markets

19.0%

US Market

Return vs Industry: LPLA underperformed the US Capital Markets industry which returned 9% over the past year.

Return vs Market: LPLA underperformed the US Market which returned 19% over the past year.


Shareholder returns

LPLAIndustryMarket
7 Day0.8%1.2%-0.06%
30 Day10.6%6.7%4.4%
90 Day12.7%8.4%6.3%
1 Year1.8%0.4%11.7%9.0%21.7%19.0%
3 Year92.8%84.9%32.0%21.8%46.4%36.7%
5 Year122.0%100.2%79.3%56.8%91.0%69.9%

Long-Term Price Volatility Vs. Market

How volatile is LPL Financial Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is LPL Financial Holdings undervalued compared to its fair value and its price relative to the market?

9.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LPLA ($92.03) is trading below our estimate of fair value ($101.56)

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


Price To Earnings Ratio

PE vs Industry: LPLA is good value based on its PE Ratio (15x) compared to the US Capital Markets industry average (22.6x).

PE vs Market: LPLA is good value based on its PE Ratio (15x) compared to the US market (19.5x).


Price to Earnings Growth Ratio

PEG Ratio: LPLA is poor value based on its PEG Ratio (4.7x)


Price to Book Ratio

PB vs Industry: LPLA is overvalued based on its PB Ratio (6x) compared to the US Capital Markets industry average (4.7x).


Next Steps

Future Growth

How is LPL Financial Holdings forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

3.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LPLA's forecast earnings growth (3.2% per year) is above the savings rate (2.2%).

Earnings vs Market: LPLA's earnings (3.2% per year) are forecast to grow slower than the US market (21.9% per year).

High Growth Earnings: LPLA's earnings are forecast to grow, but not significantly.

Revenue vs Market: LPLA's revenue (4.8% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: LPLA's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LPLA's Return on Equity is forecast to be high in 3 years time (36.8%)


Next Steps

Past Performance

How has LPL Financial Holdings performed over the past 5 years?

28.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LPLA has high quality earnings.

Growing Profit Margin: LPLA's current net profit margins (8.5%) are lower than last year (10.1%).


Past Earnings Growth Analysis

Earnings Trend: LPLA's earnings have grown significantly by 28.2% per year over the past 5 years.

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

Earnings vs Industry: LPLA had negative earnings growth (-11.9%) over the past year, making it difficult to compare to the Capital Markets industry average (3%).


Return on Equity

High ROE: Whilst LPLA's Return on Equity (40.4%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is LPL Financial Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: LPLA's short term assets ($3.0B) exceed its short term liabilities ($1.0B).

Long Term Liabilities: LPLA's short term assets ($3.0B) do not cover its long term liabilities ($3.8B).


Debt to Equity History and Analysis

Debt Level: LPLA's debt to equity ratio (194.4%) is considered high.

Reducing Debt: LPLA's debt to equity ratio has increased from 178.4% to 194.4% over the past 5 years.

Debt Coverage: LPLA's debt is well covered by operating cash flow (24.6%).

Interest Coverage: LPLA's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet


Next Steps

Dividend

What is LPL Financial Holdings's current dividend yield, its reliability and sustainability?

1.09%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LPLA's dividend (1.09%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: LPLA's dividend (1.09%) is low compared to the top 25% of dividend payers in the US market (4.15%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, LPLA has been paying a dividend for less than 10 years.

Growing Dividend: LPLA's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.3%), LPLA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LPLA's dividends in 3 years are forecast to be well covered by earnings (22.3% payout ratio).


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Dan Arnold (56 yo)

3.83yrs

Tenure

US$7,669,954

Compensation

Mr. Dan Hogan Arnold serves as President and Chief Executive Officer of LPL Financial Holdings Inc. (“LPL”) (NASDAQ: LPLA). In this role, he sets the strategy and direction for the LPL with the Board, whil...


CEO Compensation Analysis

Compensation vs Market: Dan's total compensation ($USD7.67M) is about average for companies of similar size in the US market ($USD6.90M).

Compensation vs Earnings: Dan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Dan Arnold
President3.83yrsUS$7.67m0.22%
$ 15.8m
Matthew Audette
Chief Financial Officer5.17yrsUS$3.32m0.0070%
$ 511.8k
Scott Seese
MD & Chief Information Officer3.33yrsUS$2.78m0.018%
$ 1.3m
Richard Steinmeier
MD & Divisional President of Business Development2.25yrsUS$2.22m0.026%
$ 1.9m
Dayton Semerjian
MD & Chief Customer Care Officer1.75yrsUS$2.41m0.0044%
$ 320.5k
Judy Ricketts
Executive Vice President of Operations0.58yrno datano data
George White
MD of Investor & Investment Solutions and Chief Investment Officer13.83yrsUS$2.16m0.031%
$ 2.3m
Chris Koegel
Senior Vice President of Investor Relations5.83yrsno datano data
Michelle Oroschakoff
MD & Chief Legal Officer3.42yrsUS$1.84m0.018%
$ 1.3m
Sallie Larsen
MD & Chief Human Capital Officer8.83yrsUS$1.11m0.017%
$ 1.2m
John Kalbaugh
MD and Divisional President of National Sales & Consulting4.83yrsno data0.039%
$ 2.8m
Tracy Calder
MD & Chief Risk Officer4.83yrsUS$2.41m0.0059%
$ 430.7k

4.3yrs

Average Tenure

55.5yo

Average Age

Experienced Management: LPLA's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Dan Arnold
President3.83yrsUS$7.67m0.22%
$ 15.8m
Richard Schifter
Independent Director15.08yrsUS$277.78k0.062%
$ 4.5m
Edward Bernard
Independent Director0.50yrno data0.0063%
$ 460.7k
William Glavin
Independent Director3.5yrsUS$282.78k0.021%
$ 1.5m
Anne Mulcahy
Independent Director7.5yrsUS$292.78k0.038%
$ 2.8m
H. Eberhart
Independent Director6yrsUS$281.30k0.025%
$ 1.9m
James Putnam
Independent Non-Executive Chairman3.67yrsUS$388.59k0.17%
$ 12.1m
Corey Thomas
Independent Director1.5yrsUS$266.53k0.0094%
$ 684.8k
Allison Mnookin
Independent Director2.42yrsUS$270.88k0.0053%
$ 386.9k

3.7yrs

Average Tenure

64yo

Average Age

Experienced Board: LPLA's board of directors are considered experienced (3.7 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

LPL Financial Holdings Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LPL Financial Holdings Inc.
  • Ticker: LPLA
  • Exchange: NasdaqGS
  • Founded: 1989
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: US$7.300b
  • Shares outstanding: 79.28m
  • Website: https://www.lpl.com

Number of Employees


Location

  • LPL Financial Holdings Inc.
  • 4707 Executive Drive
  • San Diego
  • California
  • 92121
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LPLANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 2010
7LIDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2010

Biography

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 financ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/23 23:43
End of Day Share Price2020/11/23 00:00
Earnings2020/09/30
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.