BlackRock Inc, the asset management company is overvalued by circa 20 % on overvalued stock and fixed income financial instruments.
According to Wolfteam Ltd.'s projections and estimates BlackRock's intrinsic value is 80 billion USD, compared with BlackRock's current market capitalisation of 100.07 billion USD.
Although BlackRock exhibited astoundingly high net profit margin of circa + 30 % in the last four quarters, in the same period the average growth rate of BlackRock's revenue was 9 %.
According to Wolfteam Ltd.'s corporate view, global stock markets and fixed income markets are overvalued. BlackRock is predominantly a fixed income asset manager. It is true, BlackRock's Exchange Traded Funds, ETFs business is growing strongly and partly substantiates BlackRock's lofty Price/Sales of of 5 ratio and partly high Price/Earnings ratio of 20, but if stock markets and fixed income markets crash significantly, BlackRock's revenue and profitability will decrease with them.
BlackRock has been trying to develop its private markets business, but the private equity and venture capital business lines are still minor compared to BlackRock's fixed income, Exchange Traded Funds, ETFs and stocks businesses.
In short, BlackRock's high profitability substantiates a lower 80 billion USD, than the current 100 billion USD market capitalization, according to Wolfteam Ltd.'s calculations.
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