No. of Recommendations: 3
Has anyone taken a stab at valuation of COF (Capital One)? I've been impressed with multiple of their products from a customer perspective.
First, I've had accounts with many, many banks, mainly online accounts, and capital one has stood out as one of the smoothest, easy to use interfaces I've encountered. (Chase is the only one that seems to come close/tie)
Second, they came out with a product a few years ago called Capital One Shopping. It works as a browser extension that provides promo codes for online sites to save money similar to other products like honey, swagbucks, and befrugal. But it does this vastly more efficiently and easy from a customer perspective (and automatically). Their product is far superior to the others in many ways (honey is the closest competitor). They seem to also monitor activity of what the user is interested in then email them special deals on that product.
My assumption is that they are able to harvest significant affiliate commissions from that shopping product. What I don't know is: 1) how much revenue they're bringing in from this and if it's just a drop in the bucket compared to their other ventures, 2) and how much of the market share they currently have in this. But I can see them easily dominating this niche area.
Currently sitting at a P/E of 6 which seems on the low end of industry competitors. EPS has fallen -35% from peak over the last year. If it continued falling back to 2019 levels, the stock would be at a P/E of 9. If it fell even further to the EPS levels where it spent most of 2011-2017 period, it'd have a PE of 14 at current prices.
Any thoughts?
