American Express has seen its share price climb 3,090% in the past 30 years, with total returns of 4,570%. The company’s network effect and strong brand position it as a high-quality business. Revenue has grown at a compound annual rate of 8.4% in the past decade, with solid growth expected. Despite historical success, the stock’s high valuation makes it less attractive for investors currently.

The combination of a strong brand and powerful network effect makes American Express a competitively advantaged business. Revenue and earnings are expected to grow as the economy expands. However, the historically expensive shares may not present a worthwhile buying opportunity at the moment. The stock’s price-to-earnings ratio of 25.7 is significantly higher than the 10-year trailing average, making it less appealing for potential investors.

American Express, founded in 1850, continues to show growth potential despite its long history and maturity in the industry. The company benefits from economic growth, increasing spending activity, and the prevalence of cashless transactions. Management has set financial goals for long-term revenue and earnings per share growth, indicating a reasonable forecast. However, the stock’s valuation is currently steep, trading well above its historical average, making it less attractive for investors at the moment.

While American Express has been a millionaire-maker stock historically, the current valuation and high price-to-earnings ratio may not present a smart buying opportunity. The company’s durable competitive strengths, network effect, and brand strength have supported its growth. However, investors should be cautious about entering the stock at its current valuation.

Before buying American Express stock, investors should consider its growth potential, competitive strengths, and valuation. The company’s network effect and brand strength have contributed to its past success, but the current high valuation may not make it a smart buying opportunity. Investors should weigh the company’s historical performance against its current market conditions before making any investment decisions.

Read more at Yahoo Finance: Is American Express Stock a Millionaire Maker?