As of May 23, 2025, Atlas Air Worldwide Holdings Inc's estimated intrinsic value ranges from $68.30 to $252.45 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $119.24 | +16.4% |
| Discounted Cash Flow (5Y) | $134.42 | +31.2% |
| Dividend Discount Model (Multi-Stage) | $68.30 | -33.4% |
| Dividend Discount Model (Stable) | $104.88 | +2.3% |
| Earnings Power Value | $252.45 | +146.3% |
Is Atlas Air Worldwide Holdings Inc (AAWW) undervalued or overvalued?
With the current market price at $102.48, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Atlas Air Worldwide Holdings Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.14 | 1.29 |
| Cost of equity | 9.1% | 12.1% |
| Cost of debt | 4.0% | 4.8% |
| Tax rate | 23.4% | 25.3% |
| Debt/Equity ratio | 0.78 | 0.78 |
| After-tax WACC | 6.5% | 8.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $134 | $5,384M | 73.6% |
| 10-Year Growth | $119 | $4,949M | 50.8% |
| 5-Year EBITDA | $157 | $6,029M | 76.4% |
| 10-Year EBITDA | $149 | $5,789M | 58.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $638M |
| Discount Rate (WACC) | 8.3% - 6.5% |
| Enterprise Value | $7,651M - $9,875M |
| Net Debt | $1,535M |
| Equity Value | $6,116M - $8,340M |
| Outstanding Shares | 29M |
| Fair Value | $214 - $291 |
| Selected Fair Value | $252.45 |
| Metric | Value |
|---|---|
| Market Capitalization | $2934M |
| Enterprise Value | $4469M |
| Trailing P/E | 8.25 |
| Forward P/E | 8.12 |
| Trailing EV/EBITDA | 6.10 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.78 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $35.77 |
| Discounted Cash Flow (5Y) | 25% | $33.60 |
| Dividend Discount Model (Multi-Stage) | 20% | $13.66 |
| Dividend Discount Model (Stable) | 15% | $15.73 |
| Earnings Power Value | 10% | $25.24 |
| Weighted Average | 100% | $124.01 |
Based on our comprehensive valuation analysis, Atlas Air Worldwide Holdings Inc's weighted average intrinsic value is $124.01, which is approximately 21.0% above the current market price of $102.48.
Key investment considerations:
Given these factors, we believe Atlas Air Worldwide Holdings Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.