MeritValue

LPL Financial Holdings Inc.

LPLAdata completeness 100%17 fiscal years on file
The thesis, from the filings

LPL Financial Holdings Inc. earns about 17% on invested capital, and has bought back 3% of its shares over 5 years. The applicable estimate puts fair value near $113.12 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$7.72B1$8.6B2$10.1B3$12.4B3$17B3
Net income$459.9M4$845.7M5$1.07B6$1.06B6$863M6
Operating cash flow$453.1M7$1.95B8$512.6M9$277.6M9−$411.4M9
Capital expenditure$216M10$306.6M11$403.3M12$562.5M12$570.4M12
Free cash flow (derived)$237.1M7$1.64B8$109.3M9−$284.9M9−$981.8M9
Total debt$2.81B13$2.72B14$3.73B15$5.49B16$7.26B16
Cash & equivalents$495.2M17$847.5M18$465.7M19$967.1M19$1.04B19
Diluted shares81.7M81.3M77.9M75.4M79.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$676
your share of equity
Profit it earned you last year
$109.16
Free cash flow it threw off
−$124.18
Debt you’d be carrying
$918.11

10 shares is a claim on $676 of net worth that earned you $109.16 and generated −$124.18 of cash last year, against $918.11 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
17% avg · 5y
FY21 14%FY22 23%FY23 23%FY24 17%FY25 10%

It earned an average 17% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−3% shares · 5y

Share count is down 3% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 158% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$113.12
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$863M
  • growthAssumed0.0%
Graham Number
$128.88
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001397911-24-000011 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001397911-25-000018 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-010705 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001397911-24-000011 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001397911-25-000018 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-010705 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001397911-24-000011 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001397911-25-000018 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-010705 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001397911-24-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001397911-25-000018 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001628280-26-010705 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001397911-23-000024 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001397911-24-000011 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001397911-25-000018 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0001628280-26-010705 (LongTermDebt)
  17. 10-K · period ending 2021-12-31 · accession 0001397911-24-000011 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001397911-25-000018 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001628280-26-010705 (CashAndCashEquivalentsAtCarryingValue)