Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 10
With the recent run up to $250 I thought it might be useful to do a quick check in on valuation.
Lets assume they have EPS of $2.31 this quarter (yahoo lists the avg. estimate at $2.33). This would result in a TTM of $9.58. At $250 it generates a PE multiple of 26. In the past 20+ quarters this value had ranged between a low of 18 and a high of 32.
18 x $9.58 = $172
32 x $9.58 = $306
so on this level this looks like a solid range.
On the Revenue side, they might generate $96B this quarter or $379B of the TTM period. At ~$3,000B this would imply a multiple of 7.9x. Over the same period as above it has cycled between a low of 4.6 and a high of 8.1.
$379B x 4.6 = $1,743B
$379B x 8.1 = $3,069B
In general we have moved from a very attractive valuation level (in the $150s - which I was a very active buyer), to a level that is bordering on the high side.
tecmo
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No. of Recommendations: 1
thanks for this. I still think Goog is attractive. My premise is revenue growth through cloud & AI will be strong. Of course, we don't know which keeps it interesting!
No. of Recommendations: 1
thanks for this. I still think Goog is attractive. My premise is revenue growth through cloud & AI will be strong. Of course, we don't know which keeps it interesting!
What type of growth are you expecting? The past few years its averaged about 13% (which is very strong considering their size and scale).
tecmo
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No. of Recommendations: 2
Some numbers
2024 : $350B
2025 : $400B x 7 = $2,800B ($233)
2026 : $460B x 7 = $3,220B ($268)
2027 : $529B x 7 = $3,703B ($308)
This would be roughly 15% annual revenue growth. Share price forecast is based on a P/S multiple of 7x. Could they grow revenues faster than 15%? In 2022 they had a growth spurt and had >20% growth rate for a while, so I guess its possible.
When I loaded up earlier this year, I was expecting a bounce back to more normal valuation levels - which has happened.
tecmo
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No. of Recommendations: 1
"What type of growth are you expecting? "
I don't know but Google is my 2nd largest position after Berkshire.
No. of Recommendations: 9
In general we have moved from a very attractive valuation level (in the $150s - which I was a very active buyer), to a level that is bordering on the high side.
Sounds reasonable.
I historically noted that entry points under 6x trailing four quarter sales per share tended to work out well. (That number would be expected to drift lower over the years, though slowly, so ignore that). It's 9x now.
My Alphabet was one of the few US stocks I still have a position in (mostly derivatives). I closed about 30% yesterday, probably more shortly. My magic 8-ball suggests there may be good opportunities to deploy cash some time in the next year or two. Great firm, but I don't foresee many reasons to conclude it deserves a higher price a year from now, so the cash might have a higher return. And can be used in other ways, too.
Jim
No. of Recommendations: 6
FYI: I sold roughly 5% of my holdings this morning, with a plan to lighten the load further. This particular lot was up 67% in a very short time period.
In at $151.11 out at $253.16 ...
tecmo
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No. of Recommendations: 4
Am often too short sighted with my investments. Trading in and out of Berkshire on variations of P/B for example. When I look at my non-Berkshire trading activity over the past year, a certain sense of guilt takes over (what happened to "buy and hold"?). Was the trading all worth it? In the long run? Probably not given the amount of time spent obsessing over current price, some wins, some losses, but mostly break even.
Recall that on 7/28/2025 our esteemed moderator and polymath, Manlobbi, estimated a potential 5X move in the stock price over the next ten years (my interpretation of his IV/10/price method outlined in his book). On that day GOOGL closed at $193/share. A 5x on that price would mean almost $1,000/share in ten years (~14% annualized). I'll take it, given other prospects in a generally overvalued market. May trim some of my GOOGL position to raise cash in the coming days, but will certainly keep a significant portion of my net worth in this company. As Manlobbi has outlined, the future growth prospects (for search (advertising), cloud, You Tube, Waymo, etc) seem overwhelmingly bright.
Perhaps Manlobbi can chime in.
If you go back and read some of his earliest posts on this board - they have been amazingly prescient.
No. of Recommendations: 1
Same.
I have a 3 year price target of $395 based off 12% eps growth and 30 TM. Gives 16% compound pa from here. Doesn't seem unreasonable given they're performing well.
Depends on market sentiment of course. We could have a run up past 300 before the end on the year or we could head back down to 200, take your pick.
