Asset Structure Analysis
BlackRock’ s total assets were $123.2 billion as of December 31, 2023, up from $117.6 billion as of December 31, 2022.
Cash and cash equivalents were $8.7 billion as of December 31, 2023, accounting for 7% of total assets.
Accounts receivable were $3.9 billion as of December 31, 2023, making up 3.2% of total assets.
Investments were $9.74 billion as of December 31, 2023, representing 7.9% of total assets.
Separate account assets were $56.1 billion as of December 31, 2023, constituting 45.5% of total assets.
Separate account collateral held under securities lending agreements were $4.56 billion as of December 31, 2023, composting 3.7% of total assets.
Intangible assets were $18.26 billion as of December 31, 2023, accounting for 14.8% of total assets.
Goodwill was $15.5 billion as of December 31, 2023, making up 12.6% of total assets.
Liquidity and Solvency
BlackRock’ s total liabilities were $82 billion with the debt ratio of 66.6% as of December 31, 2023.
Considering the size of goodwill and intangible assets, the debt ratio was undervalued, but total assets still covered total liabilities.
Profitability Analysis
The company’s total revenues were $17.86 billion, $17.87 billion and $19.37 billion in 2023, 2022 and 2021, respectively.
Interest expenses were $292 million in 2023, indicating the company has very little interest-bearing debt.
Net income was $5.68 billion, $5 billion and $6.2 billion in 2023, 2022 and 2021, respectively.
The net profit margin was 31.8%, 28% and 32% in 2023, 2022 and 2021, respectively.
Cash Flow Analysis
BlackRock’ s net cash provided by operating activities were $4.17 billion, $4.96 billion and $4.94 billion in 2023, 2022 and 2021, respectively.
The amount of the company’s cash flow has been lower than that of the net income in the past three years.
Purchases of property and equipment were $344 million, $533 million and $341 million in 2023, 2022 and 2021, respectively.
The free cash flow was $3.826 billion, $4.619 million and $4.599 billion in 2023, 2022 and 2021, respectively.
Stock-based compensation was $630 million, $708 million and $734 million in 2023, 2022 and 2021, which can be setoff by repurchases of stock.
The free cash flow after stock-based compensation was $3.2 billion, $3.9 billion and $3.9 billion in 2023, 2022 and 2021, respectively.
BlackRock’ s operating performance for the six months ended to June 30, 2024
The company’s total revenues were $9.53 billion and $8.7 billion in the six months ended to June 30, 2024 and the six months ended to June 30, 2023.
The total revenues in the six months ended to June 30, 2024 were up 9.5% year-on-year.
Net income was $3.16 billion and $2.6 billion in the six months ended to June 30, 2024 and the six months ended to June 30, 2023.
Conclusion
BlackRock faces a question regarding its lack of total revenue growth. The company’s P/E ratio is 24.28.
The growth in total revenue may not be sufficient to maintain this P/E ratio.
Stock-based compensation could reduce the stock’s valuation. We estimate that BlackRock’s reasonable valuation is about $60 billion, yet the company’s market capitalization is $133.6 billion, which is equivalent to $901.81 per share.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
BlackRock, Inc. is a leading publicly traded investment management firm with $10.0 trillion of assets under management (“AUM”) at December 31, 2023. With approximately 19,800 employees in more than 30 countries who serve clients in over 100 countries across the globe, BlackRock provides a broad range of investment management and technology services to institutional and retail clients worldwide.