Stock fact sheet · data as of
HSBC Holdings plc (HSBC): fair value, margin of safety and Wheel Score
Financial Services · Banks - Diversified · United Kingdom · ADR · Defensive
Is HSBC undervalued?
HSBC Holdings plc (HSBC) closed at 94.54 on 16 Oct 2026. The GLS average fair value - the simple average of the 9 valuation models that produced a positive number - is 140.80, which puts the price 33% below it. 5 of the 9 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.
The 9 models disagree widely: Graham Number gives 19.61 while Payback Time gives 231.05. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files HSBC under Defensive: a low beta, a dividend and positive earnings.
Nine valuation models for HSBC
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 144.86 | +53% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 19.61 | -79% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 225.70 | +139% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 83.97 | -11% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 228.85 | +142% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 196.40 | +108% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 231.05 | +144% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 54.59 | -42% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 82.20 | -13% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -686.19 | -826% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 52.00 | -45% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is average - HSBC passes 5 of the nine Piotroski tests, which falls one point short of the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 4.3 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC 4.9%, ROE 11.2%, ROA 0.7% - with debt at 1.29 times equity and negative free cash flow.
The dividend yield is 3.90% at a payout ratio of 0%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold.
Institutional ownership scores 1/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 5 / 9 | ROIC | 4.9% |
|---|---|---|---|
| GLS Moat | 4.3 / 10 | ROE | 11.2% |
| Debt / equity | 1.29 | ROA | 0.7% |
| Free-cash-flow yield | 0.0% | Payout ratio | 0% |
| Institutions | 1 / 10 | Insiders · Congress | 1 · 5 / 10 |
Wheel Score 81: Prime
HSBC scores 81 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 25/25), Piotroski health (11/20), the GLS moat (6/15), the option premium on offer (18/20) and how easily the stock trades (20/20).
Implied volatility is 33% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (18 of 20 points). The option chain is deep: 90,082 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 1.9M shares a day on a market cap of $327.3B, with a beta of 0.57 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 33% margin of safety | |
| Health | 11 / 20 | Piotroski 5/9 | |
| Moat | 6 / 15 | moat 4.3/10 | |
| Premium | 18 / 20 | implied volatility 33% | |
| Stability | 20 / 20 | 1.9M shares/day, $327.3B cap, beta 0.57 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
HSBC Holdings plc reports earnings on 27 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Banks - Diversified
The 12 companies below are the closest to HSBC Holdings plc by market cap within the Banks - Diversified industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| BACRP Bank of America Corporation PFD SER B 7% | 300.00 | 483.13 | +38% | 39No options | $361.5B |
| BAC Bank of America Corporation | 51.70 | 156.82 | +67% | 82Prime | $361.5B |
| RY Royal Bank of Canada | 193.82 | 375.59 | +48% | 76Good | $269.4B |
| MUFG Mitsubishi UFJ Financial Group, Inc. | 21.86 | 703.78 | +97% | 94Prime | $250.5B |
| WFC Wells Fargo & Company | 80.91 | 139.23 | +42% | 77Good | $244.7B |
| C Citigroup Inc. | 123.19 | 162.45 | +24% | 71Good | $206.6B |
| TD The Toronto-Dominion Bank | 117.63 | 158.47 | +26% | 75Good | $198.7B |
| SAN Banco Santander, S.A. | 13.41 | 37.09 | +64% | 80Prime | $196.9B |
| UBS UBS Group AG | 47.15 | 75.19 | +37% | 85Prime | $144.4B |
| BBVA Banco Bilbao Vizcaya Argentaria, S.A. | 25.95 | 91.89 | +72% | 82Prime | $144.3B |
| JPM JPMorgan Chase & Co. | 335.53 | 377.62 | +11% | 67Good | $891.9B |
| BMO Bank of Montreal | 166.05 | 311.77 | +47% | 74Good | $115.4B |
⚖ Compare HSBC with 7 of them All Financial Services stocks →
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Start free See the Sunday ScanQuestions about HSBC
Is HSBC undervalued right now?
By the GLS models, yes: at 94.54 the stock is 33% below the average fair value of 140.80 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of HSBC and what does it mean?
HSBC scores 81 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for HSBC?
140.80 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does HSBC Holdings plc report earnings next?
The next earnings report is due on 27 Oct 2026 (before the open), 11 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does HSBC have listed options, and how liquid are they?
Yes. The nightly snapshot found 902 listed contracts with 90,082 open interest across all expiries and implied volatility of 33% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.