As of June 13, 2025, Brookdale Senior Living Inc's estimated intrinsic value ranges from $1.02 to $13.75 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $6.89 | -0.5% |
| Discounted Cash Flow (5Y) | $1.62 | -76.6% |
| Dividend Discount Model (Multi-Stage) | $13.75 | +98.4% |
| Earnings Power Value | $1.02 | -85.3% |
Is Brookdale Senior Living Inc (BKD) undervalued or overvalued?
With the current market price at $6.93, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Brookdale Senior Living 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 | 0.59 | 1.15 |
| Cost of equity | 6.6% | 11.3% |
| Cost of debt | 5.2% | 23.9% |
| Tax rate | 3.9% | 5.4% |
| Debt/Equity ratio | 2.79 | 2.79 |
| After-tax WACC | 5.4% | 19.6% |
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 | $2 | $4,479M | 73.2% |
| 10-Year Growth | $7 | $5,715M | 52.3% |
| 5-Year EBITDA | $9 | $6,188M | 80.6% |
| 10-Year EBITDA | $12 | $6,798M | 59.9% |
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 | $367M |
| Discount Rate (WACC) | 19.6% - 5.4% |
| Enterprise Value | $1,874M - $6,802M |
| Net Debt | $4,099M |
| Equity Value | $(2,225)M - $2,703M |
| Outstanding Shares | 234M |
| Fair Value | $(9) - $12 |
| Selected Fair Value | $1.02 |
| Metric | Value |
|---|---|
| Market Capitalization | $1624M |
| Enterprise Value | $5723M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 10.65 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 2.79 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $2.07 |
| Discounted Cash Flow (5Y) | 29% | $0.41 |
| Dividend Discount Model (Multi-Stage) | 24% | $2.75 |
| Earnings Power Value | 12% | $0.10 |
| Weighted Average | 100% | $6.26 |
Based on our comprehensive valuation analysis, Brookdale Senior Living Inc's weighted average intrinsic value is $6.26, which is approximately 9.6% below the current market price of $6.93.
Key investment considerations:
Given these factors, we believe Brookdale Senior Living Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.