HSBC Holdings plc Fundamental Analysis (NYSE: HSBC)
HSBC Holdings plc (NYSE: HSBC) shows moderate financial fundamentals with a PE ratio of 11.80, profit margin of 19.91%, and ROE of 14.09%. The company generates $139.3B in annual revenue with weak year-over-year growth of -6.42%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 26.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HSBC's fundamental strength across five key dimensions:
Efficiency Score
WeakHSBC struggles to generate sufficient returns from assets.
Valuation Score
ExcellentHSBC trades at attractive valuation levels.
Growth Score
WeakHSBC faces weak or negative growth trends.
Financial Health Score
WeakHSBC carries high financial risk with limited liquidity.
Profitability Score
WeakHSBC struggles to sustain strong margins.
Key Financial Metrics
Is HSBC Expensive or Cheap?
P/E Ratio
HSBC trades at 11.80 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HSBC's PEG of 0.19 indicates potential undervaluation.
Price to Book
The market values HSBC Holdings plc at 1.58 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 1.60 times EBITDA. This is generally considered low.
How Well Does HSBC Make Money?
Net Profit Margin
For every $100 in sales, HSBC Holdings plc keeps $19.91 as profit after all expenses.
Operating Margin
Core operations generate 25.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.09 in profit for every $100 of shareholder equity.
ROA
HSBC Holdings plc generates $0.81 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
HSBC Holdings plc generates limited operating cash flow of $0.00, signaling weaker underlying cash strength.
Free Cash Flow
HSBC Holdings plc generates weak or negative free cash flow of $0.00, restricting financial flexibility.
FCF Per Share
Each share generates $0.00 in free cash annually.
FCF Yield
HSBC converts 0.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.80
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.19
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.22
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.39
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.83
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
0.008
vs 25 benchmark
ROCE
Return on capital employed
0.01
vs 25 benchmark
How HSBC Stacks Against Its Sector Peers
| Metric | HSBC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.80 | 20.35 | Better (Cheaper) |
| ROE | 14.09% | 610.00% | Weak |
| Net Margin | 19.91% | 641.00% | Weak |
| Debt/Equity | 2.39 | 0.91 | Weak (High Leverage) |
| Current Ratio | 0.83 | 799.65 | Weak Liquidity |
| ROA | 0.81% | -77.00% (disorted) | Weak |
HSBC outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews HSBC Holdings plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
145.25%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
393.24%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-81.09%
Industry Style: Value, Dividend, Cyclical
Declining