LPL Financial HoldingsLPLA -2.75%86 ROE % is 25.85% as of Mar. 2026, which is 37% below its 10-year median of 41.34. GuruFocus rates LPLA with a GF Score™ of 86/100 and a GF Value™ of $461.58 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 791 Capital Markets companies, LPL Financial Holdings ranks better than 78.76% on this metric.
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Capital Markets subindustry, LPL Financial Holdings's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
LPL Financial Holdings ROE % vs Capital Markets Industry
For the Capital Markets industry and Financial Services sector, LPL Financial Holdings's ROE % distribution charts can be found below:
* The bar in red indicates where LPL Financial Holdings's ROE % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
ROE % is displayed in the 30-year financial page.
LPL Financial Holdings (LPLA) has a ROE % of 25.85% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on LPL Financial Holdings and its competitors. This is 37% below median its historical median of 41.34. Over the past decade, LPL Financial Holdings' ROE % has ranged from 18.56 to 56.05. According to the industry distribution chart, LPL Financial Holdings ranks #168 out of 791 companies in the Capital Markets industry, placing it in the top 21.2%.
Is LPL Financial Holdings' ROE % too high?
LPL Financial Holdings' current ROE % of 25.85% is 37% below median its 10-year median of 41.34. Over the past 10 years, this metric has ranged from a low of 18.56 to a high of 56.05. The Capital Markets industry median ROE % is 6.00. LPL Financial Holdings' value of 25.85% is 330.8% above this industry median. Based on the distribution chart, LPL Financial Holdings ranks #168 out of 791 companies in the Capital Markets industry, which is in the top quartile — a strong position relative to peers. Overall, LPL Financial Holdings has a GF Score™ of 86/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does LPL Financial Holdings' ROE % compare to TW and IREN?
According to the Capital Markets industry distribution chart, LPL Financial Holdings ranks #168 out of 791 companies for ROE %. This places LPL Financial Holdings in the top 21% of its industry — outperforming the majority of peers. The industry median ROE % is 6.00. LPL Financial Holdings' value of 25.85% is 330.8% above this benchmark. Historically, LPL Financial Holdings' own ROE % has ranged from 18.56 to 56.05 over the past decade. While the company's 10-year median is 41.34 vs. the industry median of 6.00, LPL Financial Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROE % for a Capital Markets company?
The median ROE % among Capital Markets companies is 6.00, based on 791 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. LPL Financial Holdings's current ROE % of 25.85% is 330.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on LPL Financial Holdings and its competitors. For the Capital Markets industry, the median ROE % is 6.00 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. LPL Financial Holdings's current ROE % is 25.85%, which is 37% below median its own 10-year median of 41.34. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is LPL Financial Holdings stock overvalued right now?
Based on GuruFocus' analysis, LPL Financial Holdings (LPLA) is currently considered Significantly Undervalued. The stock's GF Value™ is $461.58, compared to a current price of $274.38 — trading 40.6% below its estimated fair value. The current ROE % is 25.85%, which is 37% below median its 10-year median of 41.34 and 330.8% above the Capital Markets industry median of 6.00. LPL Financial Holdings' overall GF Score™ is 86/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For LPL Financial Holdings (LPLA), the current ROE % is 25.85% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is LPL Financial Holdings (LPLA) Overvalued in 2026?
Based on GuruFocus' analysis, LPL Financial Holdings stock appears to be undervalued.
The current stock price of $274.38 is trading 40.6% below its estimated GF Value™ of $461.58.
GuruFocus considers LPL Financial Holdings to be Significantly Undervalued.
Key valuation signals for LPLA:
ROE %: 25.85% (37% below median its 10-year median of 41.34)
GF Value™: $461.58 vs. price of $274.38 (40.6% below fair value)
Industry Position: 330.8% above the Capital Markets median (#168 of 791)
No single metric tells the full story. See the LPLA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
LPL Financial is the largest US independent broker-dealer, with more than 32,000 financial advisors affiliated with its platform and roughly 11 million customer accounts at the end of 2025. The firm earns the bulk of its profit from interest income earned on client cash balances and from advisory fees and commissions tied to the $2.4 trillion in assets under management or advisory on its platform at year-end 2025. LPL specializes in providing turnkey wealth management services for affiliated independent advisors, but maintains a diverse array of affiliation modalities, running the gamut from more traditional employee models to a pure RIA custody approach. It earns tuck-in revenue from recordkeeping fees and the provision of software tools and services to its advisor base.
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