• Wondering whether Berkshire Hathaway is attractively priced at around US$710,900 per share, or if the stock already reflects its strengths? This article breaks down what the current market value might be telling you.
• The share price is around US$710,900, with returns that declined 2.4% over the past week, were roughly flat over the past month at 0.1%, and declined 4.5% year to date and 6.1% over the past year, compared with gains of 41.3% over three years and 61.9% over five years.
• Recent coverage has focused on Berkshire Hathaway's role as a diversified financial group, its large portfolio of listed stocks, and its ongoing capital allocation decisions. All of these factors shape how investors think about risk and opportunity. These themes help explain why the share price can move even without company specific announcements grabbing headlines.
• On Simply Wall St's 6 point valuation framework, Berkshire Hathaway records a value score of 5. The next sections break this down across different valuation methods, before closing with a broader way to think about what the numbers really mean for you.

Approach 1: Berkshire Hathaway Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to earn over and above the return that shareholders require, then capitalizes those excess profits into an intrinsic value per share.

For Berkshire Hathaway, the starting point is a book value of US$505,559.42 per share and a stable earnings per share estimate of US$63,684.58, based on the median return on equity from the past 5 years. The implied cost of equity is US$40,344.61 per share, which leaves an excess return of US$23,339.97 per share. This is supported by an average return on equity of 11.75% and a stable book value estimate of US$542,107.44 per share from two analysts.

Feeding these inputs into the Excess Returns model produces an estimated intrinsic value of about US$1,140,233.86 per share. Compared with the current share price of around US$710,900, the model points to the stock trading at a 37.7% discount to this estimate.

Result: UNDERVALUED

Our Excess Returns analysis suggests Berkshire Hathaway is undervalued by 37.7%. Track this in your watchlist or portfolio, or discover 46 more high quality undervalued stocks.

Approach 2: Berkshire Hathaway Price vs Earnings

The P/E ratio is a common way to value profitable companies because it links what you pay for the stock to the earnings that each share generates. In general, higher growth expectations and lower perceived risk can justify a higher “normal” or “fair” P/E, while slower growth or higher risk can point to a lower one.

Berkshire Hathaway currently trades on a P/E of 14.11x. This sits below the Diversified Financial industry average of 17.73x and also below the peer average of 23.28x, so on simple comparisons the stock trades at a lower multiple than many comparable companies.

Simply Wall St’s Fair Ratio for Berkshire Hathaway is 17.03x. This is a proprietary estimate of the P/E that might be expected after factoring in the company’s earnings profile, industry, profit margins, market cap and risk characteristics. Because it adjusts for these company specific features, the Fair Ratio can be more informative than looking at raw industry or peer averages alone. Comparing the Fair Ratio of 17.03x with the current P/E of 14.11x indicates that the stock is trading below this tailored estimate.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Berkshire Hathaway Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives. These let you attach a clear story to your numbers by linking your view of Berkshire Hathaway’s future revenue, earnings and margins to a forecast and then to a fair value estimate that you can compare with the current share price.

On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors. Each Narrative sets out assumptions and produces a Fair Value that updates automatically when new information such as earnings or news is added, so you can quickly see whether your story still holds up.

For Berkshire Hathaway, one investor might build a Narrative around a higher fair value of about US$1,403,572.59 per share based on stronger excess returns. Another might use a lower fair value of about US$527,845.85 per share based on more cautious assumptions. Comparing either figure with the current price can help each investor decide whether the stock looks rich or reasonable relative to their own story.

For Berkshire Hathaway however we will make it really easy for you with previews of two leading Berkshire Hathaway Narratives:

Fair value: about US$943,785.74 per Class A share

Discount to this fair value: around 24.7% below the narrative estimate

Revenue growth assumption: 13%

• Emphasises Berkshire Hathaway's balance sheet strength, with low debt and substantial cash reserves supporting flexibility for acquisitions, internal investments, or buybacks.
• Highlights a disciplined value investing approach focused on businesses with durable competitive advantages and an emphasis on long term shareholder value.
• Sees the leadership transition to Greg Abel as building on Warren Buffett's philosophy, with an ongoing focus on financial resilience and measured capital deployment.

Fair value: about US$604,196.40 per Class A share

Premium to this fair value: around 17.7% above the narrative estimate

Revenue growth assumption: 3.6%

• Argues that Berkshire Hathaway's size and diversified operations limit growth and tie the business more closely to broad economic conditions.
• Points to a tilt toward cash and short term fixed income, suggesting management may prioritise capital protection and optionality over aggressive expansion.
• Flags succession, concentration risk in key holdings, and regulation sensitive insurance and energy operations as important areas for investors to watch.

These two Narratives frame the same stock in very different ways. The key is deciding which set of assumptions feels closer to your own view of Berkshire Hathaway's balance sheet, earnings power, and leadership.

To see how other investors are weighing up those trade offs, and where they think the current share price sits against fair value over time, take a look at the full range of Narratives and how they update as new data comes in To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Berkshire Hathaway on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Do you think there's more to the story for Berkshire Hathaway? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.