Is Capital One Financial Corporation (COF) overvalued?
On Equity Rank's model estimate, COF trades close to its fair value (3% above it). Capital One Financial Corporation (COF) last closed at $201.87; the multi-method model fair value is $196.23.
| Price | Model fair value | Price vs model |
|---|---|---|
| $201.87 | $196.23 | 3% above |
What the answer rests on
- 6 of 13 valuation methods put COF's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, COF's free cash flow would need to grow about -13.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 26.6% a year.
- COF trades at 12.6 times its last year's earnings, against a median of 12.2 for 253 profitable Banks companies.
- Over the past year the price sat below the model fair value on 6% of trading days. The gap ranged from 3% below to 21% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind COF's fair value · What prices assume · Other companies