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1. Company Snapshot

1.a. Company Description

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States.Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and auction rate notes.The company also provides advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities.


In addition, it offers money market programs; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors.Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling.The company was formerly known as LPL Investment Holdings Inc.


and changed its name to LPL Financial Holdings Inc.in June 2012.LPL Financial Holdings Inc.


was founded in 1989 and is based in San Diego, California.

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1.b. Last Insights on LPLA

LPL Financial Holdings Inc.'s recent performance was positively driven by strong Q3 earnings, with adjusted EPS increasing 25% year-over-year to $5.20, and gross profit growing 31% year-over-year to $1,479 million. The company's acquisition of Commonwealth Financial Network and Atria Wealth Solutions contributed to its growth, with total advisory and brokerage assets increasing 45% year-over-year to $2.3 trillion. Additionally, LPL Financial's strategic deals, including the onboarding of First Horizon with $18 billion of brokerage and advisory assets, have fueled growth.

1.c. Company Highlights

2. LPL Financial's Q3 Earnings: A Strong Performance

LPL Financial reported a robust third quarter, with adjusted EPS reaching a record $5.20, surpassing analyst estimates of $4.49. The company's adjusted pretax margin stood at approximately 38%, underscoring its operational efficiency. Revenue growth was driven by the acquisition of Commonwealth and organic growth, with total assets reaching a record $2.3 trillion. The company's ability to attract $33 billion in organic net new assets, representing a 7% annualized growth rate, was a notable highlight. As CFO Matt Audette mentioned, the company is making progress in reducing its cost to serve, with core G&A below the outlook range for the quarter.

Publication Date: Nov -15

📋 Highlights
  • Record Total Assets: Reached $2.3 trillion, driven by Commonwealth acquisition and 7% organic growth ($33B net new assets).
  • Commonwealth Integration Progress: 80% adviser retention achieved, with $425M run-rate EBITDA expected post-2026 integration.
  • Cost Efficiency Gains: Core G&A below outlook, reducing 2025 EBITDA outlook to $1.86-$1.88B due to accelerated cost savings.
  • Strong Financial Performance: Adjusted EPS hit record $5.20, with 38% adjusted pretax margin from pricing and cost initiatives.
  • Capital Allocation Focus: Prioritizing organic growth and M&A over buybacks; cash balances at $568M (down $3B from Q2).

Acquisition and Integration Update

The acquisition of Commonwealth is progressing well, with nearly 80% of advisers representing nearly 80% of assets already signed to stay with Commonwealth and LPL. The company is on track to onboard Commonwealth in the fourth quarter of 2026, with a run-rate EBITDA expectation of approximately $425 million once fully integrated. This transaction is expected to result in a 9x multiple, with every incremental percentage of retention above 80% reducing the multiple by 1/10 of a turn or increasing run-rate EBITDA by $5 million.

Pricing and Margin Expansion

LPL is making strategic pricing changes, lowering fees in the advisory side to remain competitive while increasing fees in the brokerage side to align with market rates. The 100 bps improvement in margin is attributed to these pricing changes, with further cost-side improvements expected in the future. The company's focus on operational efficiency and cost management is expected to drive continued margin expansion.

Valuation and Growth Prospects

With a P/E Ratio of 35.6 and an EV/EBITDA multiple of 13.29, LPL Financial's valuation reflects its strong growth prospects. Analysts estimate next year's revenue growth at 25.3%, driven by the company's expanding presence in the wealth management industry. The company's return on equity (ROE) stands at 20.61%, indicating its ability to generate returns for shareholders. As LPL continues to execute on its growth strategy, its valuation multiples may expand further, driven by its improving financial performance and growth prospects.

Capital Management and Shareholder Returns

LPL's capital management framework remains focused on allocating capital aligned with returns generated, investing in organic growth first, pursuing M&A, and returning excess capital to shareholders. The company's leverage ratio stood at 2.04x at the end of Q3, below initial expectations. While share repurchases remain paused, the company is expected to revisit this once Commonwealth is onboarded, potentially leading to increased shareholder returns in the future.

3. NewsRoom

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Matthew Morningstar Joins LPL as Chief Legal Officer

Dec -05

Source: globenewswire.com

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LPL Financial Celebrates 15 Years as a Public Company with Nasdaq Bell Ringing Ceremony

Dec -04

Source: globenewswire.com

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LPL Financial to Present at the Goldman Sachs Financial Services Conference

Dec -02

Source: globenewswire.com

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LPL Financial Welcomes Kūpono Wealth Planning

Dec -02

Source: globenewswire.com

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LPL Financial Reports a Rise in October Brokerage & Advisory Assets

Nov -21

Source: zacks.com

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LPL Financial Reports Monthly Activity for October 2025

Nov -20

Source: globenewswire.com

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LPL Financial Acquires Minority Stake in Private Advisor Group

Nov -20

Source: zacks.com

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Republic Capital Group Advises Private Advisor Group on its Minority Investment by LPL Financial

Nov -20

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.00%)

6. Segments

Brokerage and Investment Advisory Services

Expected Growth: 15%

LPL Financial Holdings Inc.'s 15% growth in Brokerage and Investment Advisory Services is driven by increasing demand for wealth management, expansion of independent advisor network, and strategic acquisitions. Additionally, the company's technology enhancements, such as its ClientWorks platform, have improved advisor efficiency and client engagement, contributing to the growth.

7. Detailed Products

Wealth Management

LPL Financial Holdings Inc. offers a range of wealth management services, including investment management, financial planning, and retirement planning, to help individuals and families achieve their financial goals.

Brokerage Services

LPL Financial Holdings Inc. provides brokerage services, including trading and execution, to individual and institutional clients, offering access to a range of investment products and markets.

Insurance Services

LPL Financial Holdings Inc. offers a range of insurance products, including life insurance, long-term care insurance, and disability insurance, to help individuals and families protect their financial well-being.

Retirement Plan Services

LPL Financial Holdings Inc. provides retirement plan services, including 401(k), 403(b), and IRA plans, to help employers and employees plan for retirement.

Custody and Clearing Services

LPL Financial Holdings Inc. provides custody and clearing services, including trade execution, settlement, and custody, to independent financial advisors and institutions.

8. LPL Financial Holdings Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

LPL Financial Holdings Inc. operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand reputation and wide range of financial services help to mitigate the threat of substitutes.

Bargaining Power Of Customers

LPL Financial Holdings Inc. has a large customer base, but individual customers do not have significant bargaining power. The company's diversified customer base and wide range of financial services help to reduce the bargaining power of customers.

Bargaining Power Of Suppliers

LPL Financial Holdings Inc. has a diverse supplier base, and no single supplier has significant bargaining power. The company's strong financial position and long-term contracts with suppliers also help to reduce the bargaining power of suppliers.

Threat Of New Entrants

The financial services industry has high barriers to entry, including regulatory hurdles and significant capital requirements. While new entrants may emerge, they are unlikely to pose a significant threat to LPL Financial Holdings Inc.'s market position.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. LPL Financial Holdings Inc. faces intense competition from other financial institutions, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.53%
Debt Cost 6.78%
Equity Weight 35.47%
Equity Cost 8.11%
WACC 7.25%
Leverage 181.92%

11. Quality Control: LPL Financial Holdings Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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LPL Financial Holdings

A-Score: 5.3/10

Value: 5.0

Growth: 6.9

Quality: 5.6

Yield: 0.0

Momentum: 8.5

Volatility: 6.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

371.01$

Current Price

371.01$

Potential

-0.00%

Expected Cash-Flows