Capital One has gotten torched over the last six months - since December 2025, its stock price has dropped 23% to $183.03 per share. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.
Is now the time to buy Capital One, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Capital One Not Exciting?
Even though the stock has become cheaper, we’re sitting this one out for now. Here are three reasons you should be careful with COF, plus one stock we’d rather own.
1. EPS Barely Growing
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Capital One’s EPS grew at a weak 4.6% compounded annual growth rate over the last five years, lower than its 15.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
2. Substandard TBVPS Growth Indicates Limited Asset Expansion
Tangible book value per share (TBVPS) is a crucial metric that measures the actual value of shareholders’ equity, stripping out goodwill and other intangible assets that may not be recoverable in a worst-case scenario.
To the detriment of investors, Capital One’s TBVPS grew at a weak 1.4% annual clip over the last two years.
3. Previous Growth Initiatives Haven’t Impressed
Return on equity, or ROE, quantifies financial firm profitability relative to shareholder equity — an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.
Over the last five years, Capital One has averaged an ROE of 9.7%, uninspiring for a company operating in a sector where the average shakes out around 10%.
Final Judgment
Capital One isn’t a terrible business, but it doesn’t pass our bar. Following the recent decline, the stock trades at 8.8× forward P/E (or $183.03 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We’re pretty confident there are more exciting stocks to buy at the moment. Let us point you toward our favorite semiconductor picks and shovels play.
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