Principal Financial Group, Inc.PFGNASDAQ
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Executive Summary
Latest Data: Dec 2025Financial Services•Insurance - Diversified
$20.3BLarge Cap
A smaller-scale business, with exceptional profitability, with revenues declining valued in line with the market.
Key Investment Themes
Declining revenues (-99%)
Exceptional 665% net margins
Business Narrative
Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.
Financial ServicesInsurance - Diversified
Recurring Revenue
Revenue Mix
Single segment business
Bull Case
- +Exceptional margins indicate durable competitive advantages
Bear Case
- -Declining revenues signal potential market share erosion
Company at a Glance
Business Performance
Key Highlights
Positive Signals
- Best-in-class profit margins above 25%
- Conservative balance sheet with low debt levels
Watch Areas
- Revenue declining year-over-year
- Negative free cash flow - burning cash
- Current liabilities exceed current assets
Financial Health
Liquidity
Concern
Current Ratio0.00
<1.0 = Weak
Cash & Equivalents$4.4B
Leverage
Concern
Debt / Equity0.33
<1.0 = Low leverage
Interest Coverage0.00x
<2x = Tight
Efficiency
Concern
Return on Equity10.0%
8-15% = Fair
Return on Capital2.7%
<8% = Weak
Valuation Assessment
Market Cap
$20.3B
Large Cap
P/E (TTM)
17.3x
In-line
vs 5Y avg: 14.9x (+16%)
P/S (TTM)
1.8x
Discounted
vs 5Y avg: 23.3x (-92%)
EV/EBITDA
25.4x
Elevated
vs 5Y avg: 9.7x
(+161%)
(+161%)
P/E Historical Range (5Y)
Min: 4.4xAvg: 14.9xNow: 17.3xMax: 29.8x
P/S Historical Range (5Y)
Min: 1.1xAvg: 23.3xNow: 1.8xMax: 111.7x
EV/EBITDA Historical Range (5Y)
Min: 3.2xAvg: 9.7xNow: 25.4xMax: 17.7x
Valuation Corridor
CHEAP
FCF Yield
13.4%
vs Cost of Capital ~8.0% = Strong
P/E Corridor (5Y)17.3x
4.4xFair: 5.5x-24.4x29.8x
P/S Corridor (5Y)1.8x
1.1xFair: 1.1x-72.7x111.7x
EV/EBITDA Corridor (5Y)25.4x
3.2xFair: 3.7x-15.7x17.7x
Detailed Financials
Comprehensive financial statement data for deep analysis
| Metric | Dec 21 | Dec 22 | Dec 23 | Dec 24 | Dec 25 |
|---|---|---|---|---|---|
| Return on Equity | - | - | - | - | - |
| Return on Invested Capital | - | - | - | - | - |
| Gross Margin | 49.0% | 63.0%↑28.4% | 43.2%↓31.4% | 45.6%↑5.6% | 100.0%↑119.3% |
| Operating Margin | 13.2% | 34.1%↑157.8% | 5.4%↓84.2% | 11.7%↑116.7% | 5815.5%↑49535.0% |
| Net Margin | 11.0% | 27.1%↑147.7% | 4.6%↓83.2% | 9.7%↑113.6% | 664.7%↑6723.4% |
| Earnings Yield | - | - | - | - | - |
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