A moat score of 60 points to a durable competitive position, but the management score of 44 is held down by a return on invested capital of just 3.4%, with debt to equity at 1.2x. Gross margin sits at 56.1%, so the business converts revenue efficiently even as returns on the capital deployed remain modest, and free cash flow yield of 3.1% reflects that same constraint.
The current price sits well below all three valuation anchors: $30.76 on a margin of safety basis, $129.89 on a 10-cap basis, and $205.04 on payback terms, with the consensus buy price also at $205.04. Reaching those anchors rests on the 15.0% growth rate used in the model, the same rate measured from historical performance, carried alongside a 14.2x exit multiple against a current price to earnings of 14.7x.
The tension is that the margin of safety score of 48 reflects a price that looks inexpensive against the higher anchors, while the low return on invested capital raises the question of whether growth at that pace can be sustained on the balance sheet as it stands.
| Price | $64.00 |
| Market cap | $454.2B |
| P/E ratio | 14.7x |
| Return on invested capital | 3.4% |
| Gross margin | 56.1% |
| Debt to equity | 1.21x |
| Free cash flow yield | 3.1% |
| Growth rate used | 15.0% |
| Growth rate measured | 15.0% |
| Exit multiple assumed | 14.2x |
| Company | Moat | Mgmt | Margin of safety |
|---|---|---|---|
| JPMorgan Chase & Co. (JPM) | 65 | 60 | 51 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Bank of America rather than accepting ours.