Berkshire news lifted BSP 47% in two days to $55.89. With 3% organic growth and $7.7 billion of deal debt, 25 times my $1.61 of 2027 profit points to $40.15.
Key points
- 69% above the $33 Berkshire placement price after a two day spike on deal news, not earnings.
- 3% organic sales growth in Q2, meaning sales from owned businesses, shows most of the 126% jump came from buying others.
- $7.7 billion of pro forma net debt, or debt less cash for all announced deals, dwarfs the $793 million of June cash.
The call
The market is too optimistic. At $55.89 the equity is worth about $36.9 billion. That value needs roughly $2.6 billion of lasting operating profit. My 2027 build reaches only about $2.0 billion, even with two big new deals included.
Shares spiked 47 percent in two days on Berkshire newsRallies daily candles through Oct 15, 2026; $33 placement price from Oct 14, 2026 6-K.
I see a leveraged buyer worth less. Organic growth was 3% last quarter, so gains depend on debt funded deals. Yearly interest near $600 million eats a third of operating profit. My $1.61 of adjusted profit a share, or profit before deal costs, at 25 times profit supports $40.15.
Valuation
| Item | Value |
|---|
| 2027 revenue with Airtable and Miro | $3.92 billion |
| 2027 adjusted operating profit at 50% margin | $1.96 billion |
| 2027 adjusted profit a share after $603 million of interest | $1.61 |
| Fair multiple for 3% grower with high debt | 25 times |
| Twelve month target | $40.15 a share |
Even a rich 30 times leaves shares below the priceOwn estimates from Q2 filing and deal 6-Ks; multiples applied to $1.61 2027E adjusted EPS.
A serial buyer with 3% organic growth and rising leverage should not trade like a fast compounder. Paying 25 times profit is already generous and still leaves 28% downside, which is why this is a strong sell.
Risks
- Deals could add more profit than I model if Airtable and Miro grow fast, which I would see in quarterly revenue and deferred sales balances.
- Berkshire backing could keep a scarcity premium, meaning extra value from a famous backer, which I would see in the shares holding above $50 on heavy volume.
- Debt could prove cheaper if rates fall or cash builds fast, which I would see in lower interest bills and the leverage ratio in filings.
What would change my mind
Double digit same business sales growth with falling net debt over two quarters would raise my profit and multiple.