Is LPL Financial Holdings, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for LPL Financial Holdings, Inc. has moved from very expensive to expensive, indicating a slight improvement in perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 42, a Price to Book Value of 15.99, and an EV to EBITDA of 25.04, all of which suggest a premium valuation compared to industry norms.
In comparison to peers, LPL Financial's P/E ratio of 42 is significantly higher than that of Morgan Stanley at 16.79 and The Charles Schwab Corp. at 27.45, both of which are in the expensive and attractive categories, respectively. Additionally, the PEG ratio of 3.14 indicates that the stock may not be justified at its current price relative to its growth prospects. While LPL Financial has outperformed the S&P 500 over the past year with a return of 33.87% compared to 10.26%, the high valuation metrics suggest that caution is warranted for potential investors.