Is There Still Value in Berkshire Hathaway After the Latest Record High in 2025?

If you have been debating what to do with Berkshire Hathaway’s stock, you are definitely not alone. The company’s shares have been drawing plenty of attention lately, and for good reason. Berkshire may not provide the steep daily swings of flashier growth names, but its patient, long-term track record is tough to ignore. Over the past five years, the stock is up an impressive 132.0%, while returns of 84.9% over three years and 8.2% over the past year continue to demonstrate resilience, despite recent market volatility. Even over shorter time frames such as 0.1% over the past week and month, Berkshire has held steady as broader markets digest shifting headlines and economic signals.

Some of this stability is thanks to the company’s unique structure and Warren Buffett’s famously cautious investment approach. Berkshire is often seen as a safe harbor during uncertain periods and a foundational holding for investors who value reliable, if not always spectacular, growth. Lately, the perception of risk appears to have eased a bit, supporting the stock’s relatively gentle climb in 2024, with an 11.1% year-to-date gain. With market developments constantly evolving around interest rates and the economic outlook, investors are weighing not just how much Berkshire can grow, but what it is actually worth at these heights.

According to a recent valuation assessment, Berkshire scores 4 out of 6 on key undervaluation checks. That means it currently passes four important tests for undervaluation, which is an encouraging sign for bargain seekers but far from the full picture. Up next, let’s look at exactly how Berkshire stacks up across well-known valuation methods, and, even more importantly, explore how you can get a clearer read on the stock’s true value beyond just these standard tools.

Why Berkshire Hathaway is lagging behind its peers

Approach 1: Berkshire Hathaway Excess Returns Analysis

The Excess Returns model focuses on how effectively Berkshire Hathaway uses its capital to generate returns above its cost of equity. This method measures not just earnings, but also the company’s ability to create value over and above what investors could earn elsewhere at comparable risk levels.

For Berkshire Hathaway, the numbers are impressive. The current book value stands at $464,307.83 per share, while stable earnings per share (EPS) are calculated at $64,432.73 per share. These EPS figures are based on the median return on equity from the past five years, reflecting consistency. The average return on equity is 13.00%, which comfortably exceeds its cost of equity of $37,780.86 per share. That results in an excess return of $26,651.87 per share. In addition, analysts project a stable book value of $495,490.17 per share using weighted future estimates.

Based on these strengths, the Excess Returns valuation estimates Berkshire Hathaway’s intrinsic value to be approximately 30.6% higher than its current share price. This suggests the stock is undervalued by a significant margin.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Berkshire Hathaway.

Our Excess Returns analysis suggests Berkshire Hathaway is undervalued by 30.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Berkshire Hathaway Price vs Earnings

For profitable companies such as Berkshire Hathaway, the price-to-earnings (PE) ratio is one of the most commonly used valuation metrics. It relates a company’s share price to its per-share earnings, helping investors quickly gauge how much they are paying for current profits. The right or “fair” PE ratio for a business typically depends on a mix of factors: companies with higher expected growth, stronger profitability, and lower perceived risk often trade at higher multiples, while riskier or slow-growing firms usually demand a discount.

Berkshire Hathaway’s current PE ratio stands at 17.16x. That is slightly above the Diversified Financial industry average of 16.47x, but well below the peer group average of 26.75x. At first glance, this puts Berkshire in a favorable spot compared to many listed competitors, though only slightly richer than the broader industry.

To more accurately assess whether Berkshire is truly fairly priced, we look to Simply Wall St’s proprietary “Fair Ratio.” This metric refines the idea of a benchmark multiple by blending growth prospects, risk profile, profit margins, industry norms, and market capitalization specifics into a single fair value multiple. Because it tailors the benchmark specifically to Berkshire’s unique situation, it often offers a more nuanced signal than generic peer or industry comparisons. For Berkshire, the Fair Ratio is calculated at 19.79x, comfortably higher than its current PE ratio of 17.16x. This suggests that, even adjusting for Berkshire’s strengths and risks, the stock still trades below a sensible value estimate.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Berkshire Hathaway Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal story about a company, connecting your view of its future performance, like expected revenue and profit margins, with your fair value estimate, all grounded in actual financial forecasts.

Narratives bridge the gap between the numbers and real-life decision making, allowing you to express and adjust your perspective on Berkshire Hathaway with just a few inputs. Available to millions of investors in Simply Wall St's Community page, Narratives make it easy to quickly see how your assumptions stack up and what that means for whether the stock is over or undervalued based on your view.

Because Narratives are updated dynamically whenever news or earnings arrive, you always have the most relevant information, making it easier to decide whether it is time to buy, sell, or wait. For example, some investors use Narratives to back a cautious outlook, leading them to a fair value near $403 per share for Berkshire Hathaway (Class B), while others with a more bullish forecast land on a value as high as $943,786 per share (Class A). Your Narrative helps you act with confidence, using a process smarter than just looking at industry averages.

For Berkshire Hathaway, however, we'll make it really easy for you with previews of two leading Berkshire Hathaway Narratives:

🐂 Berkshire Hathaway Bull Case

Fair Value: $943,785.74

Undervalued by approximately 20.5%

Revenue Growth (projected): 13%

• Highlights Berkshire's strong financial foundation with low debt and large cash reserves, positioning it for resilience and future opportunities.
• Endorses a disciplined, value-based investment approach and thoughtful succession planning under Greg Abel, mentored by Warren Buffett.
• Projects net inflation-adjusted share price growth of 12 to 15 percent, suggesting Berkshire could deliver solid, long-term returns for patient investors.

🐻 Berkshire Hathaway Bear Case

Fair Value: $604,196.40

Overvalued by approximately 24.2%

Revenue Growth (projected): 3.6%

• Emphasizes the company's shift toward defensive positioning with a substantial cash hedge, potentially limiting short-term upside.
• Notes limited growth prospects across key operating businesses and highlights risks related to management transition and regulatory changes.
• Forecasts revenue growth lagging broader markets, with valuation capped by Berkshire’s increasing exposure to overall market forces and mature business mix.

Do you think there's more to the story for Berkshire Hathaway? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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