As of June 7, 2025, Aritzia Inc has a Discounted Cash Flow (DCF) derived fair value of $115.45 per share. With the current market price at $67.65, this represents a potential upside of 70.7%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $85.05 |
| DCF Fair Value (10-year) | $115.45 |
| Potential Upside (5-year) | 25.7% |
| Potential Upside (10-year) | 70.7% |
| Discount Rate (WACC) | 4.9% - 6.5% |
Revenue is projected to grow from $2738 million in 03-2025 to $6661 million by 03-2035, representing a compound annual growth rate of approximately 9.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2025 | 2738 | 17% |
| 03-2026 | 3212 | 17% |
| 03-2027 | 3611 | 12% |
| 03-2028 | 3921 | 9% |
| 03-2029 | 4477 | 14% |
| 03-2030 | 4997 | 12% |
| 03-2031 | 5411 | 8% |
| 03-2032 | 5683 | 5% |
| 03-2033 | 6042 | 6% |
| 03-2034 | 6344 | 5% |
| 03-2035 | 6661 | 5% |
Net profit margin is expected to improve from 8% in 03-2025 to 8% by 03-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2025 | 208 | 8% |
| 03-2026 | 243 | 8% |
| 03-2027 | 274 | 8% |
| 03-2028 | 297 | 8% |
| 03-2029 | 339 | 8% |
| 03-2030 | 379 | 8% |
| 03-2031 | 410 | 8% |
| 03-2032 | 431 | 8% |
| 03-2033 | 458 | 8% |
| 03-2034 | 481 | 8% |
| 03-2035 | 505 | 8% |
with a 5-year average of $139 million. Projected CapEx is expected to maintain at approximately 7% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2026 | 173 |
| 03-2027 | 208 |
| 03-2028 | 236 |
| 03-2029 | 261 |
| 03-2030 | 274 |
| 03-2031 | 303 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 3 |
| Days Inventory | 103 |
| Days Payables | 40 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2026 | 524 | 97 | 217 | 125 | 85 |
| 2027 | 603 | 109 | 244 | (10) | 259 |
| 2028 | 665 | 119 | 265 | 31 | 250 |
| 2029 | 751 | 136 | 303 | 71 | 242 |
| 2030 | 820 | 151 | 338 | 35 | 296 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 85.05 | 25.7% |
| 10-Year DCF (Growth) | 115.45 | 70.7% |
| 5-Year DCF (EBITDA) | 28.94 | -57.2% |
| 10-Year DCF (EBITDA) | 42.73 | -36.8% |
Is Aritzia Inc (ATZ.TO) a buy or a sell? Aritzia Inc is definitely a buy. Based on our DCF analysis, Aritzia Inc (ATZ.TO) appears to be significantly undervalued with upside potential of 70.7%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $67.65.