Since March 2025, LPL Financial has been in a holding pattern, posting a small return of 0.9% while floating around $362.20. The stock also fell short of the S&P 500’s 9.7% gain during that period.
Is now the time to buy LPLA? Or does the price properly account for its business quality and fundamentals? Find out in our full research report, it’s free.
Why Are We Positive On LPL Financial?
As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ:LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Over the last five years, LPL Financial grew its revenue at an excellent 19.9% compounded annual growth rate. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
LPL Financial’s spectacular 21.3% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.
Over the last five years, LPL Financial has averaged an ROE of 40.4%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows LPL Financial has a strong competitive moat.
Final Judgment
These are just a few reasons why we think LPL Financial is a high-quality business. With its shares lagging the market recently, the stock trades at 17.8× forward P/E (or $362.20 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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