Where Does Berkshire Hathaway Stand After Its 10.8% Gain in 2025?

Thinking about what to do with Berkshire Hathaway stock? You are definitely not alone. Whether you are already a shareholder or still weighing the pros and cons, recent moves in the share price are sure to catch your eye. With a last close at 500.03, the stock has returned 1.5% over the past week and 0.9% in the past month. Year-to-date gains sit at 10.8%, echoing a solid 9.3% over the last year and a remarkable 87.3% over three years. If you zoom out even further, Berkshire is up an impressive 136.8% in five years. These are not numbers you just ignore.

Part of this resilience is due to Berkshire Hathaway’s unique position as a collection of businesses, which tend to hold up well during bouts of market volatility. Recent market developments, such as concerns about inflation and shifts in interest rates, have only highlighted the company’s reputation as a long-term safe haven, attracting both cautious and growth-minded investors. Of course, even a name as storied as Berkshire is not immune to risk perception. The steady climb may hint at renewed optimism, but it could also signal that some investors see less upside compared to other opportunities.

But what about value? Objectively, Berkshire Hathaway scores a 3 out of 6 on our valuation check system, so it is undervalued on three key criteria. That does not end the story, though. Next, we will walk through these different valuation approaches one by one, and I will share a more insightful way to understand what the score really means for your investment decision.

Berkshire Hathaway delivered 9.3% returns over the last year. See how this stacks up to the rest of the Diversified Financial industry.

Approach 1: Berkshire Hathaway Excess Returns Analysis

The Excess Returns model focuses on a simple question: does the company earn more on its shareholders’ equity than it costs to maintain that equity? For Berkshire Hathaway, this approach looks at how much profit it generates above its cost of capital, which is a powerful measure of whether the business is creating value over the long haul.

Right now, Berkshire Hathaway has an average return on equity of 13.00%, well ahead of its estimated cost of equity at $37,910.48 per share. Using median return figures from the past five years, analysts calculate stable earnings per share of $64,432.73, based on a book value per share of $464,307.83. Over the forecast horizon, the company’s stable book value is projected to rise to $495,490.17, reflecting compounded growth across its many businesses.

The result is excess returns per share of $26,522.25, which is a strong indicator of sustained outperformance. According to this model, Berkshire’s intrinsic value is $717.47 per share. With shares last closing at $500.03, the Excess Returns approach implies Berkshire is undervalued by 30.3% at current prices. For value-oriented investors, this represents an attractive margin of safety.

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 30.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Berkshire Hathaway Price vs Earnings

For profitable companies like Berkshire Hathaway, the price-to-earnings (PE) ratio is a popular way to gauge valuation because it directly compares market price to the bottom-line profits the business generates. Investors use PE to understand how much they are paying for each dollar of a company’s earnings, making it a simple but powerful tool, especially for businesses with consistent profitability.

Of course, a “normal” or “fair” PE ratio can vary widely. It is influenced not just by the company’s earnings growth, but also by market sentiment and risk. Fast-growing companies tend to justify higher PEs, while businesses facing more uncertainty often trade at lower multiples. For Berkshire Hathaway, the current PE ratio stands at 17.1x. This compares favorably to the average PE for the Diversified Financial industry at 16.8x and is well below the peer average of 28.0x. This may indicate that investors are more cautious or have slightly lower growth expectations for Berkshire relative to its peers.

But how do you know if 17.1x is truly fair? That is where Simply Wall St’s proprietary Fair Ratio comes in. This benchmark is tailored to factors like Berkshire Hathaway’s earnings growth, profit margins, risks, industry, and even its market cap. Unlike simple comparisons to industry or peer averages, the Fair Ratio offers a nuanced assessment that considers the whole picture. For Berkshire, the Fair Ratio is 17.1x, nearly identical to its actual PE. This suggests that the market price for Berkshire currently reflects its risk and growth profile quite accurately.

Result: ABOUT RIGHT

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. Let us introduce you to Narratives. A Narrative is a simple, powerful tool that lets you attach your own perspective to Berkshire Hathaway by linking the company’s story, your chosen assumptions for growth, and your estimate of fair value, all in one place. This approach makes investing less about chasing numbers and more about envisioning what the future could look like. You can then test that story with real financial forecasts and market data.

Available right now on Simply Wall St’s Community page, Narratives are created and used by millions of investors to help bring clarity to their investment decisions. They help you decide whether to buy or sell by directly comparing your Fair Value (which changes as your story or the data changes) to today’s market Price. What makes them especially valuable is that Narratives update dynamically as new news or earnings reports come in, so your thesis always stays current. For Berkshire Hathaway, some investors’ Narratives project strong future growth and a much higher fair value, while others, more cautious, anticipate slower returns and a lower fair value, all grounded in the latest company data and personal outlooks.

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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