Synchrony Financial Intrinsic Stock Value – Synchrony Financial Sees Growing Purchase Volume Boost Q3 Earnings

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Synchrony Financial ($NYSE:SYF), a consumer financial services company, recently announced its Q3 earnings had surpassed expectations due to increased purchase volume. The company reported its highest-ever purchase volume, a result of its strategic investments in digital capabilities and partnerships with leading e-commerce and retail brands. It offers a range of products including private label credit cards, dual cards, general purpose co-branded credit cards, and installment loans, as well as savings products through Synchrony Bank, its wholly-owned online bank subsidiary.

Through its strategic partnerships with major retailers and e-commerce companies, Synchrony provides customers with access to convenient financing options and rewards programs. Its products can be used both in-store and online, giving customers the flexibility to shop how and where they want.

Earnings

In the latest earnings report of FY2023 Q3 ending September 30 2021, SYNCHRONY FINANCIAL reported total revenues of 2.49B USD and net income of 1.14B USD. While there was a 14.7% decrease in total revenue as compared to the same quarter last year, this was offset by a 62.9% increase in net income. Over the past three years, SYNCHRONY FINANCIAL has seen growing purchase volume, with total revenue going from 2.49B USD to 3.48B USD. This can be attributed to the company’s diversification of its product offering and successful partnerships with top retailers.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Synchrony Financial. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Synchrony Financial. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Synchrony Financial. More…

Key Ratios Snapshot

Some of the financial key ratios for Synchrony Financial are shown below. More…

Market Price

On Tuesday, Synchrony Financial‘s stock opened at $29.0 and closed at $27.4, indicating a decline of 4.4% from the previous closing price of 28.6. This was a result of the company’s announcement that their purchase volume had increased for the third quarter of their fiscal year. Synchrony Financial indicated that the purchase volume was higher than it was in the same period of the prior year, leading to an increase in their earnings.

The boost in purchase volume is attributed to the company’s strong performance in both the consumer and commercial credit sectors. The company also credited their success to their focus on providing customers with a wide range of products and services which has helped them to build a loyal customer base. Live Quote…

Analysis – Synchrony Financial Intrinsic Stock Value

At GoodWhale, we have conducted an analysis of SYNCHRONY FINANCIAL‘s wellbeing. Using our proprietary Valuation Line, we have determined that the fair value of SYNCHRONY FINANCIAL share is around $54.8. Currently, SYNCHRONY FINANCIAL stock is being traded at $27.4, which is significantly lower than the estimated fair value. This means that SYNCHRONY FINANCIAL is currently undervalued by 50.0%. More…

Peers

In the financial services industry, Synchrony Financial competes with American Express Co, Bread Financial Holdings Inc, and Discover Financial Services. All four companies offer credit cards, loans, and other financial products to consumers and businesses. While each company has its own strengths and weaknesses, Synchrony Financial has been able to compete effectively against its rivals.

– American Express Co ($NYSE:AXP)

American Express is a financial services company with a market cap of 107.94B as of 2022. The company provides credit cards, charge cards, and traveler’s checks to consumers and businesses worldwide. It also operates a global network of merchant acquirers and processors. American Express was founded in 1850 and is headquartered in New York, New York.

– Bread Financial Holdings Inc ($NYSE:BFH)

Bread Financial Holdings Inc is a publicly traded company with a market capitalization of 1.48 billion as of 2022. The company is engaged in the business of providing financial services, including banking, lending, and investing. Bread Financial Holdings Inc operates through its subsidiaries, including Bread Bank and Bread Investment Management.

– Discover Financial Services ($NYSE:DFS)

Discover Financial Services is a publicly traded company with a market capitalization of $25.52 billion as of 2022. The company provides consumer and student loans, credit cards, and personal banking products and services. Discover also operates the Discover Network, a payments network that processes credit card and debit card transactions.

Summary

Synchrony Financial reported a strong third quarter with revenue and earnings that beat analysts’ estimates. The company attributed its success to growing purchase volume, which resulted in higher net interest income. On the cost side, Synchrony Financial saw a modest increase in operating expenses due to investments in technology and marketing initiatives.

Additionally, the company continued to benefit from a low-interest rate environment, resulting in improved profitability. Despite the strong quarter, Synchrony Financial’s stock price moved down the same day due to investor concerns about the impact of the coronavirus on consumer spending. Nevertheless, the long-term prospects of the company remain intact due to its strong customer base and wide range of credit products. As such, investors may view Synchrony Financial as a good investment opportunity.