Is Berkshire Hathaway Stock a Buy, Sell, or Fair Value Post-Earnings?
Berkshire Hathaway (BRK.B) released its third-quarter earnings report on November 1, 2023. The report highlights significant developments in the company’s operations, particularly within its insurance segment.
Overview of Berkshire Hathaway’s Q3 Earnings
The earnings were largely in line with expectations. Narrow-moat-rated Berkshire Hathaway continues to show strength in its insurance business, even as other sectors face challenges.
Key Financial Metrics
- Adjusted operating revenue: $95.0 billion, a 2.1% increase year-over-year.
- Adjusted operating earnings: $13.5 billion, up 33.6% year-over-year.
- Book value per share: Increased by 10.9% to $485,429 from $437,580 at the end of September 2024.
The firm’s insurance operations, including Geico and the Berkshire Hathaway Reinsurance Group, have been crucial in supporting overall performance. However, normalization in underwriting results was observed following the period of strong results, attributed to reduced price increases and increased catastrophe losses earlier in 2025.
Valuation Insights
Despite some fluctuations in performance, Morningstar maintains a fair value estimate of $765,000 per Class A share and $510 per Class B share. The stock is regarded as moderately undervalued, with a 4-star rating.
Comparative Metrics
- Current fair value estimate: $510 per share.
- Historical trading average over the past decade: 1.49 times trailing book value per share.
Challenges and Opportunities
Berkshire Hathaway faces challenges due to its size, making it tough to identify large, value-adding acquisitions. The future performance of its insurance operations is uncertain, particularly in competitive markets that may result in significant losses.
Financial Strength and Economic Moat
The company boasts a strong balance sheet, with $344.1 billion in cash and cash equivalents as of June 2025. Its insurance units are overcapitalized, ensuring robust financial health.
Though the economic moat is considered solid, competitive pressures continue to challenge Berkshire’s various segments. Long-term performance remains positive, with book value per share increasing at an estimated rate of 18.3% over the past several decades, outperforming the S&P 500.
In conclusion, Berkshire Hathaway’s stock represents an interesting proposition for investors as it balances its historical strengths with current operating challenges. The current earnings report offers insight into the company’s resilience and potential for long-term growth.
