American Express (NYSE:AXP) stock had a rough day in the market on Friday March 23. Shares dropped -1.05% and closed the day at $90.45. They're now trading 11.66% below their 52-week high of $102.39.
With today's drop, American Express now has a market cap of $78 billion. That makes it a large cap company.
The business operates in the credit card industry and employs 55,000 people. Its shares trade primarily on the New York stock exchange.
American Express has 860.14 million shares outstanding and 5.06 million traded hands for the day. That's above the average 30-day volume of 3.97 million shares. The amount of American Express stock is also dropping as the company buys back its own shares. In the last 12 months, it repurchased $4,315 million worth.
Over the last five years, American Express's revenue is up by 5.33%. You can see this growth in annual revenue chart below...
In the last year alone, American Express's revenue has grown by 5.2%. That's a solid sign for American Express stock owners.
We like to invest in companies that grow their sales. A growing top line is a sign of a healthy business.
For now, American Express will continue to pull in revenue. So let's take a closer look at the company's total financial health. And the best way to do that is by looking at its balance sheet... American Express's cash comes in at $33 billion and the company's debt is $60 billion...
American Express's cash pile is smaller than its total debt. This is common for many companies. They can issue debt at a lower cost to take on new projects.
What is American Express Stock Worth?
To determine the value of American Express stock let's look at a few key metrics…
Price-to-Earnings (P/E): This is one of the most widely used metrics and it comes in at 15.02. That's a reasonable level and generally, the lower the better. Investors will bid up stock prices and in turn, P/E ratios, when they expect future earnings to grow.
Price-to-Book (P/B): This ratio is a cornerstone for value investors. A lower number here indicates a better value play. And at 4.26, American Express looks reasonable… but P/B varies greatly based on the industry.
These two metrics are a great place to start when valuing a company... but your analysis should go much deeper...