Is Berkshire Hathaway (BRK.A) Offering Long Term Value After Recent Flat Share Price Performance

Simply Wall St.02-24 15:32

For investors considering whether Berkshire Hathaway remains a sensible place to put long term capital, or whether the current price already reflects its strengths, this article walks through what the...

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class=\"title\">\nIs Berkshire Hathaway (BRK.A) Offering Long Term Value After Recent Flat Share Price Performance\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-24 15:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/diversified-financials/nyse-brk.a/berkshire-hathaway/news/is-berkshire-hathaway-brka-offering-long-term-value-after-re><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>For investors considering whether Berkshire Hathaway remains a sensible place to put long term capital, or whether the current price already reflects its strengths, this article walks through what the...</p>\n\n<a href=\"https://simplywall.st/stocks/us/diversified-financials/nyse-brk.a/berkshire-hathaway/news/is-berkshire-hathaway-brka-offering-long-term-value-after-re\">Source 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to put long term capital, or whether the current price already reflects its strengths, this article walks through what the numbers are really saying about value today.\nThe stock most recently closed at US$740,200, with returns of a 1.5% decline over 7 days, 2.7% over 30 days, a 0.5% decline year to date, a 1% decline over 1 year, 60.2% over 3 years, and 95.9% over 5 years, a mix that raises fair questions about...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4581":"高盛持仓","LU0210528500.USD":"JPM AMERICA EQUITY \"A\" ACC","LU0787776722.HKD":"AB SELECT US EQUITY PORTFOLIO \"A\" (HKD) ACC","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0971096721.USD":"富达环球金融服务 A","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0417517546.SGD":"Allianz US Equity Cl AT Acc 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H2-SGD"},"translate_title":"伯克希尔哈撒韦公司（BRK.A）在近期股价表现持平后是否提供长期价值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BRKD":0.6,"BRK.A":1.98,"BRKC":0.6,"BRKU":0.6,"BRKW":0.6},"content_text":"For investors considering whether Berkshire Hathaway remains a sensible place to put long term capital, or whether the current price already reflects its strengths, this article walks through what the numbers are really saying about value today. The stock most recently closed at US$740,200, with returns of a 1.5% decline over 7 days, 2.7% over 30 days, a 0.5% decline year to date, a 1% decline over 1 year, 60.2% over 3 years, and 95.9% over 5 years, a mix that raises fair questions about both risk and potential. Recent attention on Berkshire Hathaway has centered on its role as a broad collection of operating businesses and listed investments. Many investors use it as a proxy for diversified U.S. equity exposure. Alongside that, ongoing discussion around capital allocation decisions and the company’s large cash position has kept debate alive about what might be a reasonable price to pay for that mix of assets. Berkshire scores 5 out of 6 on our valuation checks, suggesting it screens as undervalued on most of the metrics assessed. You can see the full breakdown in its valuation score of 5. Next, we will look at how different valuation approaches line up on this stock and why there may be an even more useful way to think about fair value by the end of the article.  Berkshire Hathaway delivered -1.0% returns over the last year. See how this stacks up to the rest of the Diversified Financial industry. AdvertisementApproach 1: Berkshire Hathaway Excess Returns Analysis The Excess Returns model looks at how much profit Berkshire Hathaway is expected to earn over and above the return that shareholders require, then capitalizes that surplus to arrive at an estimated value per share. In this approach, the starting point is book value of $485,274.36 per share and a stable book value estimate of $530,761.30 per share, based on weighted future book value estimates from two analysts. Using the median return on equity from the past 5 years, the model derives a stable earnings figure of $68,181.36 per share. Against a cost of equity of $39,476.23 per share, this implies an excess return of $28,705.13 per share, with an average return on equity of 12.85%. When those excess returns are projected and capitalized, the model arrives at an intrinsic value of about $1,243,460.84 per share. Compared to the recent share price of about $740,200, the Excess Returns model implies that Berkshire Hathaway trades at a 40.5% discount, which appears materially undervalued on this methodology. Result: UNDERVALUED Our Excess Returns analysis suggests Berkshire Hathaway is undervalued by 40.5%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks. BRK.A Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Berkshire Hathaway. Approach 2: Berkshire Hathaway Price vs Earnings For a profitable company like Berkshire Hathaway, the P/E ratio is a useful shorthand because it links what you pay directly to the earnings the business is generating today. Investors usually accept a higher P/E when they expect stronger growth or see lower risk, and a lower P/E when growth is more modest or the outlook carries more uncertainty. Berkshire currently trades on a P/E of 15.79x. That sits below the Diversified Financial industry average of 16.66x and below the peer group average of 22.85x, which indicates the market prices Berkshire more conservatively than many comparable names. Simply Wall St’s Fair Ratio for Berkshire is 18.54x. This is a proprietary estimate of what a reasonable P/E could be for the company, taking into account factors like its earnings profile, industry, profit margins, market value and specific risks. Because it is tailored to Berkshire, the Fair Ratio can be more informative than a simple comparison with peers or the broad industry, which may have different growth, risk and profitability characteristics. With the current P/E of 15.79x sitting below the Fair Ratio of 18.54x, Berkshire appears undervalued on this metric. Result: UNDERVALUED NYSE:BRK.A P/E Ratio as at Feb 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 22 top founder-led companies. Upgrade Your Decision Making: Choose your Berkshire Hathaway Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple tool on Simply Wall St’s Community page that lets you connect your view of Berkshire Hathaway’s story to concrete forecasts and a Fair Value. You can then compare that to today’s price to decide whether the stock looks attractive, fully priced or expensive for you personally. A Narrative is your storyline for the company, where you set assumptions for future revenue, earnings and profit margins. The platform instantly turns that story into a forecast and a Fair Value that updates when fresh information like news or earnings is added. For Berkshire Hathaway, one investor on the platform currently has a Fair Value of about US$527,846 per Class A share, while another has a Fair Value near US$943,786. Those very different numbers reflect different Narratives about issues such as how efficiently the new leadership uses the large cash balance or how quickly the operating businesses grow over time. For Berkshire Hathaway however we will make it really easy for you with previews of two leading Berkshire Hathaway Narratives: These are real investor playbooks built from specific assumptions on growth, profitability and required return. Your own view may sit closer to one, fall in between, or be entirely different. Seeing the range helps you decide where you stand at today’s share price of about US$740,200. 🐂 Berkshire Hathaway Bull Case Fair Value: about US$943,786 per Class A share Pricing gap vs Fair Value: around 21.5% below this Narrative’s fair value estimate Revenue growth assumption: 13%  Emphasizes Berkshire Hathaway as a financially robust group with low debt, sizeable cash reserves and flexibility to act when opportunities appear. Leans on a disciplined value investing approach and the continuity of the Buffett philosophy under Greg Abel as factors that could support the business over time. Frames Berkshire as a long term compounder in which the combination of balance sheet strength and a consistent investment method are central to the investment case.  🐻 Berkshire Hathaway Bear Case Fair Value: about US$604,196 per Class A share Pricing gap vs Fair Value: around 22.6% above this Narrative’s fair value estimate Revenue growth assumption: 3.6%  Treats Berkshire Hathaway as a very large, relatively mature collection of businesses and investments, where overall growth is expected to be closer to broad economic growth. Highlights the very large cash and fixed income position, the concentration in a few major equity holdings, and the possibility that future returns are more limited than in the past. Flags succession, scale and regulatory risks, and frames Berkshire as solid but potentially fully priced or richer than this Narrative’s valuation model supports at today’s share price.  If you want to see how other investors are joining the dots between these kinds of assumptions and their own valuations, Curious how numbers become stories that shape markets? Explore Community Narratives and compare the full range of views side by side. Do you think there's more to the story for Berkshire Hathaway? Head over to our Community to see what others are saying! NYSE:BRK.A 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Berkshire Hathaway might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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