HSBC Holdings plc. Common Stock (HSBC)

FairStock Score: 48/100 — MIXED

Key Financials

Strengths

• Solid return on equity of 11.6% above cost of capital
• Attractive 4.1% dividend yield providing steady income returns
• Established organization with 2,08,720 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($40) with negative 128% margin of safety—limited downside protection
• Revenue declining at 22.8% year-over-year signals potential demand weakness or market share loss
• Weak Piotroski F-Score of 2/9 suggests deteriorating financial quality across multiple dimensions
• Altman Z-Score of 0.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

HSBC Holdings plc. Common Stock is a mega-cap financial services company valued at $313.6 billion. The business generates $63.8 billion in annual revenue with a 7.4% net margin. From a quality standpoint, HSBC shows weak Piotroski F-Score of 2/9 signaling deteriorating fundamentals and distressed Altman Z-Score of 0.1 warrants caution. On valuation, the stock is attractively valued at 14.6x earnings, with trades far above its Graham Number ($40) with no margin of safety. Growth dynamics show revenue growing at -22.8% and profit growth of 1308.5%. The 4.1% dividend yield adds an income component for patient holders. Our composite FairStock Score of 47/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

HSBC's dominant market position and scale advantages create a durable moat that supports premium valuation over time. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Sluggish -23% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer