Discover Financial Valuation
| DFS Stock | USD 129.02 0.22 0.17% |
At this time, the firm appears to be overvalued. Discover Financial shows a prevailing Real Value of $123.77 per share. The current price of the firm is $129.02. Our model computes the value of Discover Financial from reviewing the firm fundamentals such as Current Valuation of 24.89 B, profit margin of 0.23 %, and Shares Outstanding of 250.56 M as well as analyzing its technical indicators and probability of bankruptcy. In general, most investors advise acquiring undervalued instruments and selling overvalued instruments since, at some point, asset prices and their ongoing real values will submerge. Key fundamental drivers impacting Discover Financial's valuation include:
Price Book 2.1998 | Enterprise Value 24.9 B | Price Sales 3.0782 | Forward PE 10.8342 | Trailing PE 14.678 |
Overvalued
Today
Please note that Discover Financial's price fluctuation is very steady at this time. Calculation of the real value of Discover Financial is based on 3 months time horizon. Increasing Discover Financial's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Discover Financial Services is useful when determining the fair value of the Discover stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Discover Financial. Since Discover Financial is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Discover Stock. However, Discover Financial's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. | Historical | Market 129.02 | Real 123.77 | Target 101.94 | Hype 128.55 | Naive 129.94 |
The real value of Discover Stock, also known as its intrinsic value, is the underlying worth of Discover Financial Company, which is reflected in its stock price. It is based on Discover Financial's financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Discover Financial's stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Discover Financial's stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of Discover Financial Services helps investors to forecast how Discover stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Discover Financial more accurately as focusing exclusively on Discover Financial's fundamentals will not take into account other important factors: Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Discover Financial's intrinsic value based on its ongoing forecasts of Discover Financial's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Discover Financial's closest peers. When choosing an evaluation method for Discover Financial, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.
Discover Financial Investments |
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Discover Valuation Trend
Knowing Discover Financial's actual value is paramount for traders to make sound investment determinations. Discover Financial's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Discover Financial's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Discover Financial's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.
Discover Market Cap
Discover Financial Services is one of the top stocks in market capitalization category among related companies. Market capitalization of Financials industry is currently estimated at about 64.21 Billion. Discover Financial totals roughly 32.33 Billion in market capitalization claiming about 50% of equities under Financials industry.Discover Financial Valuation Ratios as Compared to Competition
Comparative valuation techniques use various fundamental indicators to help in determining Discover Financial's current stock value. Our valuation model uses many indicators to compare Discover Financial value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Discover Financial competition to find correlations between indicators driving Discover Financial's intrinsic value. More Info.Discover Financial Services is rated # 3 in price to earning category among related companies. It is rated # 2 in price to book category among related companies fabricating about 0.31 of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for Discover Financial Services is roughly 3.20 . Price To Book Ratio is likely to drop to 1.71 in 2024. Comparative valuation analysis is a catch-all model that can be used if you cannot value Discover Financial by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Discover Financial's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Discover Financial's earnings, one of the primary drivers of an investment's value.Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Discover Financial's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Discover Financial and how it compares across the competition.
About Discover Financial Valuation
The stock valuation mechanism determines the current worth of Discover Financial Services on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Discover Financial Services. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Discover Financial based exclusively on its fundamental and basic technical indicators. By analyzing Discover Financial's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Discover Financial's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Discover Financial. We calculate exposure to Discover Financial's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Discover Financial's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 20.6 B | 21.6 B | |
| Pretax Profit Margin | 0.19 | 0.28 | |
| Operating Profit Margin | 0.83 | 0.62 | |
| Net Profit Margin | 0.14 | 0.18 | |
| Gross Profit Margin | 0.90 | 0.73 |
Discover Financial Quarterly Retained Earnings |
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8 Steps to conduct Discover Financial's Valuation Analysis
Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Discover Financial's potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Discover Financial's valuation analysis, follow these 8 steps:- Gather financial information: Obtain Discover Financial's financial statements, including balance sheets, income statements, and cash flow statements.
- Determine Discover Financial's revenue streams: Identify Discover Financial's primary sources of revenue, including products or services offered, target markets, and pricing strategies.
- Analyze market data: Research Discover Financial's industry and market trends, including the size of the market, growth rate, and competition.
- Establish Discover Financial's growth potential: Evaluate Discover Financial's management, business model, and growth potential.
- Determine Discover Financial's financial performance: Analyze its financial statements to assess its historical performance and future potential.
- Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
- Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Discover Financial's estimated value.
- Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
A single share of Discover Financial represents a small ownership stake in the entity. As a stockholder of Discover, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
Discover Financial Dividends Analysis For Valuation
At this time, Discover Financial's Dividend Yield is comparatively stable compared to the past year. Dividend Payout Ratio is likely to gain to 0.40 in 2024, whereas Dividends Paid is likely to drop slightly above 556.5 M in 2024. . At this time, Discover Financial's Retained Earnings are comparatively stable compared to the past year. Retained Earnings Total Equity is likely to gain to about 34.4 B in 2024, whereas Earnings Yield is likely to drop 0.08 in 2024.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | 752 M | 556.5 M | |
| Dividend Yield | 0.03 | 0.03 | |
| Dividend Payout Ratio | 0.26 | 0.40 | |
| Dividend Paid And Capex Coverage Ratio | 19.07 | 20.02 |
There are various types of dividends Discover Financial can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Discover shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Discover Financial Services directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Discover pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Discover Financial by the value of the dividends paid out.
Discover Financial Growth Indicators
Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Discover Financial does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
| Common Stock Shares Outstanding | 254 M | |
| Quarterly Earnings Growth Y O Y | -0.691 | |
| Forward Price Earnings | 10.8342 |
Discover Financial Current Valuation Indicators
Valuation refers to the process of determining the present value of Discover Financial Services and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Discover we look at many different elements of the entity such as Discover's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Discover Financial's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Discover Financial's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Discover Financial, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Discover Financial's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Discover Financial's worth.When determining whether Discover Financial is a strong investment it is important to analyze Discover Financial's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Discover Financial's future performance. For an informed investment choice regarding Discover Stock, refer to the following important reports: Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Discover Financial Services. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in census. Note that the Discover Financial information on this page should be used as a complementary analysis to other Discover Financial's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Complementary Tools for Discover Stock analysis
When running Discover Financial's price analysis, check to measure Discover Financial's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Discover Financial is operating at the current time. Most of Discover Financial's value examination focuses on studying past and present price action to predict the probability of Discover Financial's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Discover Financial's price. Additionally, you may evaluate how the addition of Discover Financial to your portfolios can decrease your overall portfolio volatility.
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Is Discover Financial's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Discover Financial. If investors know Discover will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Discover Financial listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.69) | Dividend Share 2.8 | Earnings Share 8.79 | Revenue Per Share 39.45 | Quarterly Revenue Growth 0.294 |
The market value of Discover Financial is measured differently than its book value, which is the value of Discover that is recorded on the company's balance sheet. Investors also form their own opinion of Discover Financial's value that differs from its market value or its book value, called intrinsic value, which is Discover Financial's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Discover Financial's market value can be influenced by many factors that don't directly affect Discover Financial's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Discover Financial's value and its price as these two are different measures arrived at by different means. Investors typically determine if Discover Financial is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Discover Financial's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.