T. Rowe Price trades at $106.34 and has moved in lockstep with the market. Its shares have returned 14% over the last six months while the S&P 500 has gained 17.7%.
Is now the time to buy T. Rowe Price, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is T. Rowe Price Not Exciting?
We don't have much confidence in T. Rowe Price. Here are two reasons why TROW doesn't excite us and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
Over the last five years, T. Rowe Price grew its revenue at a sluggish 4.3% compounded annual growth rate. This fell short of our benchmark for the financials sector.
2. EPS Barely Growing
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
T. Rowe Price’s weak 2.8% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.
Final Judgment
T. Rowe Price isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 13× forward P/E (or $106.34 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're fairly confident there are better stocks to buy right now. Let us point you toward our favorite semiconductor picks and shovels play.
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