10Y annualized return is
positive but below market average
at 1.3% per year
STT has met or exceeded earnings expectations in
most
recent quarters (9/10)
Low Price-to-Earnings Ratio
Reasonable Price-to-Book Ratio
Strong Gross Profit Margin
Healthy Net Profit Margin
Low Debt-to-Assets Ratio
Reasonable Dividend Payout Ratio
🏆 Strong Service Quality and Client Relationships
💼 Diverse Revenue Streams
📈 Robust Fee Growth Strategy
🚀 Loan Growth Potential
🔍 Innovation with AI
📊 Strong Market Positioning
Negative Price-to-Cash-Flow Ratio
Negative Enterprise Value Ratios
Low Return on Equity
Operating Cash Flow Concerns
Liquidity Issues
High Debt-to-Equity Ratio
⚠️ Market Sensitivity
🛑 Regulatory Challenges
Overall, State Street demonstrates high business quality through strong service delivery and diversified revenue streams, although it faces market sensitivity and regulatory risks. Future prospects appear positive with projected loan growth and ongoing innovation, but regulatory challenges remain a concern.
Analysis Date: January 22, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
State Street Corporation is a company that helps large organizations, like pension funds and insurance companies, manage their money. They offer services such as keeping track of investments, ensuring everything is accounted for, and helping with buying and selling assets. They also provide advice on how to invest wisely and responsibly. Essentially, State Street acts as a partner for these institutions, making sure their money is handled safely and effectively.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
Image source: The Motley Fool.
State Street Corporation (NYSE:STT ) Q1 2025 Earnings Conference Call April 17, 2025 11:00 AM ET Company Participants Elizabeth Lynn - Head of IR Ron ...
State Street Corporation is one of the largest asset-servicing companies in the world. Q1 2025 earnings showed revenue up 5%, net income up 39%, and a...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$255.14
Current Market Price: $73.84
IV/P Ratio: 3.46x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
71.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for STT
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (8.45)
P/B ratio ≤ 1.5 (0.90)
Current ratio ≥ 2.0
Long-term debt < Net current assets
Margin of safety (71.0%)
STT does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
11.18%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
98.17%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
15.67%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A gross profit margin of 98.17% is exceptionally high, indicating effective cost management and strong pricing power.
The net profit margin of 15.67% reflects a strong ability to convert sales into actual profit, highlighting operational efficiency.
A return on equity (ROE) of 10.71% is relatively low, suggesting that the company may not be efficiently utilizing shareholders' equity.
The operating cash flow per share of -13.09 indicates that the company is struggling to generate cash from its operations, which could impact profitability in the future.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.31x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
STT: No data available
A debt-to-assets ratio of 9.37% indicates that the company is not overly reliant on debt to finance its assets, suggesting a lower risk profile.
A dividend payout ratio of 38.44% suggests that the company is returning a reasonable portion of its earnings to shareholders while retaining enough for growth.
With current, quick, and cash ratios all at 0.0, the company faces significant liquidity issues, which could hinder its ability to meet short-term obligations.
A debt-to-equity ratio of 1.31 suggests that the company is using a considerable amount of debt relative to equity, which could pose risks, especially in volatile markets.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
State Street has invested significantly in improving service quality through technology and AI. This enhancement is reflected in their client satisfaction metrics and the ability to retain and attract new clients, which is crucial in the competitive financial services landscape.
The company's revenue is supported by multiple segments, including asset servicing and asset management, with a notable focus on private markets. This diversification reduces reliance on any single revenue source, providing stability and resilience.
State Street's plan for sustainable growth in servicing fees has shown impressive results, with a target of $350M to $400M in servicing fees for 2024, reflecting their strategic focus and execution capabilities.
The business is sensitive to market fluctuations, as evidenced by discussions on fee pressures and currency headwinds affecting growth rates. This reliance on market conditions can pose risks to revenue stability.
State Street has projected a continued loan growth rate of approximately 14% for 2025, primarily driven by relationships with private market clients, indicating strong demand and potential for further revenue expansion.
The company is actively investing in AI and machine learning to enhance operational efficiency and client service, which could lead to improved productivity and competitive advantages in the long run.
State Street's ability to innovate and broaden its product offerings, especially in the ETF space, positions it well to capture market share and drive organic growth moving forward.
The potential for regulatory changes affecting the adoption of alternative products in 401(k) plans creates uncertainty for future growth in that segment, which could limit expansion opportunities.