American Express Company
American Express Company Fundamental Analysis
American Express Company (AXP) shows strong financial fundamentals with a PE ratio of 21.89, profit margin of 13.46%, and ROE of 33.49%. The company generates $80.7B in annual revenue with strong year-over-year growth of 10.15%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze AXP's fundamental strength across five key dimensions:
Efficiency Score
WeakAXP struggles to generate sufficient returns from assets.
Valuation Score
ModerateAXP shows balanced valuation metrics.
Growth Score
ExcellentAXP delivers strong and consistent growth momentum.
Financial Health Score
WeakAXP carries high financial risk with limited liquidity.
Profitability Score
ModerateAXP maintains healthy but balanced margins.
Key Financial Metrics
Is AXP Expensive or Cheap?
P/E Ratio
AXP trades at 21.89 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AXP's PEG of 6.02 indicates potential overvaluation.
Price to Book
The market values American Express Company at 7.08 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 15.07 times EBITDA. This signals the market has high growth expectations.
How Well Does AXP Make Money?
Net Profit Margin
For every $100 in sales, American Express Company keeps $13.46 as profit after all expenses.
Operating Margin
Core operations generate 17.14 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $33.49 in profit for every $100 of shareholder equity.
ROA
American Express Company generates $3.61 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
American Express Company produces operating cash flow of $18.48B, showing steady but balanced cash generation.
Free Cash Flow
American Express Company generates strong free cash flow of $16.05B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $23.29 in free cash annually.
FCF Yield
AXP converts 6.73% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
6.02
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.08
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.96
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.73
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.28
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.33
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How AXP Stacks Against Its Sector Peers
| Metric | AXP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.89 | 18.86 | Worse (Expensive) |
| ROE | 33.49% | 847.00% | Weak |
| Net Margin | 13.46% | 4202.00% | Weak |
| Debt/Equity | 1.73 | 0.91 | Weak (High Leverage) |
| Current Ratio | 0.28 | 667.17 | Weak Liquidity |
| ROA | 3.61% | -21543.00% (disorted) | Weak |
AXP outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews American Express Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
82.96%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
74.03%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
19.69%
Industry Style: Value, Dividend, Cyclical
High Growth