SVB Financial Group (SIVB) receives a weak valuation ranking of 30 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. SIVB has a better value than 30% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
Metrics Analysis
SIVB's trailing-12-month Price to Earnings (PE) ratio of 22.6 puts it above the historical average of roughly 15. SIVB is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. SIVB's trailing-12-month earnings per share (EPS) of 20.50 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
SIVB has a 12 month forward PE to Growth (PEG) ratio of 3.49. Markets are undervaluing SIVB in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 20.5's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
Summary
SIVB' has a weak valuation at its current share price on account of a overvalued PEG ratio due to strong growth. SIVB's PE and PEG are worse than the market average leading to a below average valuation score.
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