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LPL Financial (LPLA) Stock Analysis

This is a peer-relative look at LPL Financial (LPLA): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Financial Services peers, so every number reads in context rather than in isolation.

Company Profile

Company profile fields for LPL Financial (LPLA)
Profile ItemLPLA
NameLPL Financial Holdings Inc.
Country/RegionUnited States
GICS SectorFinancials
GICS Industry GroupFinancial Services
GICS IndustryCapital Markets
GICS Sub-IndustryInvestment Banking & Brokerage
Market Capitalization23.01 billion USD
CurrencyUSD
ExchangeNasdaq
Listing DateNovember 18, 2010
Security TypeCommon Stock

Price Performance

Cumulative Growth

LPLA
GSPC
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LPL Financial (LPLA) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for LPL Financial (LPLA) and S&P 500 (GSPC). Returns over one year are annualized.

Calendar-Year Returns

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Calendar-year total returns for LPL Financial (LPLA) and S&P 500 (GSPC). Each bar is that year's total return, measured year-end to year-end.

Performance Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
Total Return (1Y)-17.27%1.90%
Total Return (3Y, Annualized)11.10%12.71%
Total Return (5Y, Annualized)13.92%2.81%

Risk Profile

Drawdown History

LPLA
GSPC
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LPL Financial (LPLA) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Return Distribution

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Distribution of monthly total returns for LPL Financial (LPLA) and S&P 500 (GSPC). Each bar is the share of months whose return fell in that 5% bucket.

Risk Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
Volatility (1Y, Annualized)39.22%36.24%
Beta (5Y)0.521.04
Max Drawdown (5Y)-33.18%-48.56%

Risk-Adjusted Performance

Risk-Return Positioning

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Each dot is a stock plotted by 1-year volatility (risk) and 1-year return. LPLA is highlighted; the dashed line is the Capital Allocation Line from the risk-free rate through the industry median — dots above it are stronger on a risk-adjusted basis.

Risk-Adjusted Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
Sharpe Ratio (1Y)-0.55-0.09
Sortino Ratio (1Y)-0.70-0.13

Profitability

ROE (TTM)

LPL Financial (LPLA) posts ROE of 25.66%, in the upper peer quartile. That suggests the company earns more from each dollar of shareholders’ equity than most industry peers, a useful capital-efficiency signal.

LPLA

Financial Services industry group

25.66%

Group distribution
Max
44.78%
LPLA
25.66%
Q3
21.85%
Median
12.91%
Q1
4.48%
Min
-18.71%
Largest peers
MA
231.37%
V
63.51%
LPLA
25.66%
MS
18.04%
GS
17.71%
BRK.A
12.12%
BRK.B
12.12%
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Where LPL Financial (LPLA) stands on ROE within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

Net Margin (TTM)

LPL Financial (LPLA) keeps 6.97% of revenue as net profit, roughly in line with the peer group’s normal net margin range. Its full cost stack is taking a typical share of sales for the industry.

LPLA

Financial Services industry group

6.97%

Group distribution
Max
62.84%
Q3
28.05%
Median
15.36%
LPLA
6.97%
Q1
4.82%
Min
-28.52%
Largest peers
V
51.20%
MA
46.73%
GS
31.21%
MS
25.63%
BRK.A
22.30%
BRK.B
22.30%
LPLA
6.97%
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Where LPL Financial (LPLA) stands on net margin within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

Operating Margin (TTM)

LPL Financial (LPLA) turns 10.85% of revenue into operating profit, in the lower peer quartile for operating margin. Operating costs are taking a larger share of sales than they do at most peers.

LPLA

Financial Services industry group

10.85%

Group distribution
Max
107.33%
Q3
55.90%
Median
30.09%
Q1
14.60%
LPLA
10.85%
Min
-44.34%
Largest peers
V
63.73%
MA
60.53%
MS
39.00%
GS
38.37%
BRK.A
32.56%
BRK.B
32.56%
LPLA
10.85%
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Where LPL Financial (LPLA) stands on operating margin within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

Profitability Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
ROE (TTM)25.66%12.91%
ROA (TTM)7.35%3.60%
Net Margin (TTM)6.97%15.36%
Operating Margin (TTM)10.85%30.09%
Gross Margin (TTM)----

Growth

Revenue Growth

LPL Financial (LPLA) grew revenue 37.18%, in the upper peer quartile. The top line is expanding faster than at most industry peers, which points to share gains or stronger pricing.

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LPL Financial (LPLA): Revenue Growth across different time periods, set against Financial Services industry-group medians.

EPS Growth

LPL Financial (LPLA) grew earnings per share -22.17%, roughly around the peer group's normal range. Bottom-line momentum looks broadly typical for the industry.

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LPL Financial (LPLA): EPS Growth across different time periods, set against Financial Services industry-group medians.

Growth Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
Revenue Growth (YoY)37.18%9.46%
Revenue Growth (3Y CAGR)25.47%10.90%
EPS Growth (YoY)-22.17%7.46%
EPS Growth (3Y CAGR)1.64%13.04%

Financial Strength

Current Ratio (MRQ)

current ratio is set aside for LPL Financial (LPLA) in Financial Services: these balance sheets are not best read through a current/non-current split, so regulatory, funding, or liquidity-coverage measures usually matter more.

Debt / Equity (MRQ)

debt-to-equity ratio is set aside for LPL Financial (LPLA) in Financial Services: leverage is part of the business model itself, so capital adequacy, funding mix, and regulatory measures are usually better risk gauges.

Financial Strength Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
Current Ratio (MRQ)----
Debt / Equity (MRQ)----
Net Debt / EBITDA----

Dividends

Dividend Yield (TTM)

LPL Financial (LPLA) has dividend yield of 0.40%, in the industry’s normal income range. It provides a meaningful dividend without the red flag of an unusually high headline yield.

LPLA

Financial Services industry group

0.40%

Group distribution
Max
9.77%
Q3
3.92%
Median
1.09%
LPLA
0.40%
Q1
0.00%
Min
0.00%
Largest peers
MS
2.40%
GS
2.07%
V
0.66%
MA
0.53%
LPLA
0.40%
BRK.A
0.00%
BRK.B
0.00%
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Where LPL Financial (LPLA) stands on dividend yield within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

LPL Financial (LPLA) has payout ratio of 6.88%, within the industry’s typical payout band. The dividend shares profits with investors while leaving earnings coverage that looks normal for the peer group.

LPLA

Financial Services industry group

6.88%

Group distribution
Max
241.07%
Q3
97.36%
Median
25.77%
LPLA
6.88%
Q1
0.00%
Min
0.00%
Largest peers
MS
32.91%
GS
25.88%
V
21.75%
MA
17.63%
LPLA
6.88%
BRK.A
0.00%
BRK.B
0.00%
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Where LPL Financial (LPLA) stands on payout ratio within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
Dividend Yield (TTM)0.40%1.09%
Dividend Payout Ratio (TTM)6.88%25.77%

Valuation

P/E Ratio (TTM)

LPL Financial (LPLA) trades at P/E ratio of 16.93, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.

LPLA

Financial Services industry group

16.93

Group distribution
Max
45.85
Q3
24.64
LPLA
16.93
Median
15.37
Q1
9.68
Min
0.16
Largest peers
V
34.31
MA
34.15
LPLA
16.93
MS
14.39
BRK.A
14.36
BRK.B
14.36
GS
12.45
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Where LPL Financial (LPLA) stands on P/E ratio within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

P/S Ratio (TTM)

LPL Financial (LPLA) trades at 1.15 on P/S ratio, in the lower sales-valuation quartile for its industry. That points to a cheaper revenue stream than most peers, with margin quality still doing the heavy lifting.

LPLA

Financial Services industry group

1.15

Group distribution
Max
9.23
Q3
4.57
Median
2.72
Q1
1.28
LPLA
1.15
Min
-0.55
Largest peers
V
17.18
MA
15.67
MS
3.55
GS
3.52
BRK.A
3.18
BRK.B
3.18
LPLA
1.15
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Where LPL Financial (LPLA) stands on P/S ratio within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

P/B Ratio (MRQ)

LPL Financial (LPLA) trades at 3.98 on P/B ratio, in the higher book-value quartile. The market is paying a premium to book, so stronger ROE, cleaner assets, or a better growth profile need to justify it.

LPLA

Financial Services industry group

3.98

Group distribution
Max
7.79
LPLA
3.98
Q3
3.63
Median
1.57
Q1
0.81
Min
-0.39
Largest peers
MA
84.30
V
22.05
LPLA
3.98
MS
2.65
GS
2.36
BRK.A
1.72
BRK.B
0.00
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Where LPL Financial (LPLA) stands on P/B ratio within its Financial Services peer group — the box is the group’s distribution and the dots its largest members.

Valuation Metrics

LPL Financial (LPLA) metric values compared with Financial Services industry-group medians
MetricCurrent stock: LPLAIndustry group median
P/E Ratio (TTM)16.9315.37
P/S Ratio (TTM)1.152.72
P/B Ratio (MRQ)3.981.57
Free Cash Flow Yield (TTM)----