Highly Regarded

Is Berkshire Hathaway Inc. (BRK.B) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Financials sector peers in our coverage

70% Discount TTM fundamentals · sector averages from covered peers

BRK.B trades at 2.8× TTM sales — a 70% discount to its Financials sector average of 9.3× in our coverage.

BRK.B has negative trailing-twelve-month earnings, so a P/E ratio isn't meaningful — we compare on price-to-sales instead.

The Numbers

P/E (TTM)

—

Sector avg: 23.8×

P/S (TTM)

2.8×

Sector avg: 9.3×

Market Cap

$1.06T

EPS (TTM): —

Revenue (TTM)

$372.13B

Net income: $67.74B

Financials Peer Comparison

How BRK.B's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
BRK.B This page $490.86 —
V $358.55 —
MA $543.52 34.8×
BAC $61.26 16.7×
MS $215.49 22.1×
GS $1065.59 21.6×

Is the Discount Justified?

July 12, 2026

Berkshire Hathaway Inc. is reported with negative TTM earnings, making a P/E ratio inapplicable, but has a P/S ratio of 2.9x. The negative TTM earnings are often a result of GAAP accounting rules, which require the reporting of unrealized gains or losses from its vast investment portfolio, leading to significant volatility in reported net income. However, the company's operating businesses consistently generate substantial profits. For instance, Berkshire Hathaway reported Q1 2026 operating earnings of $11.35 billion and EPS of $5.25, beating analyst estimates. The P/S multiple of 2.9x reflects the market's valuation of its diverse conglomerate of wholly-owned operating companies, spanning insurance, railroads, energy, and manufacturing, as well as its significant equity holdings. This multiple suggests investors are valuing the underlying asset base and consistent operational cash flows, looking beyond the fluctuating GAAP investment income.

Sources

Frequently Asked Questions

Is BRK.B overvalued or undervalued?
On trailing-twelve-month sales, BRK.B trades at 2.8x versus a Financials sector average of 9.3x in our coverage — a 69.5% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing BRK.B with its own Financials peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Financials names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Financials peers

V JPM BAC MA MS GS