Capital One Financial Q4 Earnings: Is COF Cheap at 0.9x Price/Book?

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Capital One Financial Corporation (NYSE:COF) is scheduled to report Q4 earnings results on January 21, 2020. The company announced on December 16, 2019, that at approximately 4:05 p.m. Eastern Time on January 21, 2020, will release an earnings report and host a conference call shortly after at 5:00 p.m. Eastern Time to review financial and operating performance.

The company is expected to report earnings of $2.37/share on revenue of $7.353 billion after markets close for trading. The consensus earnings per share (EPS) of $2.37/share is based on a poll of 17 analysts and represents a growth of 26.7% over the same quarter last year when the company reported earnings of $1.87/share.

The revenue forecast of $7.353 billion based on a poll of 15 analysts implies a year-over-year (YoY) growth of 4.8%. Last year the company reported $7.013 billion in revenue for the quarter.

Expected to report EPS growth of $0.50/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $7,353.10 $7,013.00 4.8%
EPS $2.37 $1.87 26.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters. Last quarter, the company surprised investors by exceeding EPS expectations by 14.4%.

What are your expectations from Capital One for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $2.90 $3.32 14.4% Beat
Q2, 2019 $2.85 $3.37 18.0% Beat
Q1, 2019 $2.71 $2.90 6.8% Beat
Q4, 2018 $2.37 $1.87 -21.1% Missed
Q3, 2018 $2.88 $3.12 8.3% Beat
Q2, 2018 $2.62 $3.22 22.9% Beat
Q1, 2018 $2.35 $2.65 12.8% Beat
Q4, 2017 $1.84 $1.62 -12.2% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending September 30, 2019, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-24 $92.79 $93.25 0.5% Increase
2019-07-18 $88.19 $90.65 2.8% Increase
2019-04-25 $87.79 $93.73 6.8% Increase
2019-01-22 $84.97 $78.20 -8.0% Decline

Fundamentals And Technical Analysis

Capital One Financial is currently trading at $104.13/share, up 1.2% for the day. The company is trading at approximately 98.5% of its 52-week high of $105.70/share. The company’s stock price is up 11.7% since the last earnings report and up 2.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 62.15 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:COF Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 8.6x and a forward P/E multiple of 8.8x. Capital One’s current share price also implies a price-to-book (P/B) multiple of 0.9x. The following table summarizes some other key fundamental ratios:

Data as of January 20, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $104.13
P/E Ratio 8.6x
P/E Ratio (Fwd) 8.8x
PEG Ratio -3.8
Total Debt to Capital (%) 49.3%
Levered Free Cash Flow $15.623 billion

Source: Finbox

Company Profile: Capital One Financial Corporation

Capital One Financial Corporation is a large-cap stock with a market capitalization of $48.496 billion and a total enterprise value of -. The company operates in the Financial sector and the Consumer Finance industry.

Capital One operates as the bank holding company for the Capital One Bank (USA), National Association; and Capital One, National Association, which provides various financial products and services in the United States, the United Kingdom, and Canada. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company offers non-interest-bearing and interest-bearing deposits, such as checking accounts, money market deposit accounts, negotiable order of withdrawals, savings deposits, and time deposits. It also provides credit card loans; auto, home, and retail banking loans; and commercial and multifamily real estate, commercial and industrial, and small-ticket commercial real estate loans. In addition, the company offers credit and debit card products; online direct banking services; and treasury management and depository services.

It serves consumers, small businesses, and commercial clients through the Internet and mobile banking, as well as through Cafés, ATMs, and branches located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and the District of Columbia.

Capital One Financial Corporation was founded in 1988 and is headquartered in McLean, Virginia.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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