As of May 23, 2025, DFS Furniture PLC's estimated intrinsic value ranges from $51.66 to $816.17 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $183.22 | +10.0% |
| Discounted Cash Flow (5Y) | $176.36 | +5.9% |
| Dividend Discount Model (Stable) | $51.66 | -69.0% |
| Earnings Power Value | $816.17 | +390.2% |
Is DFS Furniture PLC (DFS.L) undervalued or overvalued?
With the current market price at $166.50, 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 DFS Furniture PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.67 | 0.76 |
| Cost of equity | 8.0% | 10.3% |
| Cost of debt | 6.0% | 12.5% |
| Tax rate | 19.4% | 23.3% |
| Debt/Equity ratio | 1.54 | 1.54 |
| After-tax WACC | 6.1% | 9.9% |
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 | $176 | $896M | 81.4% |
| 10-Year Growth | $183 | $912M | 65.0% |
| 5-Year EBITDA | $(1,234) | $490M | 65.9% |
| 10-Year EBITDA | $37 | $578M | 44.7% |
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 | $177M |
| Discount Rate (WACC) | 9.9% - 6.1% |
| Enterprise Value | $1,797M - $2,921M |
| Net Debt | $493M |
| Equity Value | $1,304M - $2,428M |
| Outstanding Shares | 2M |
| Fair Value | $570 - $1,062 |
| Selected Fair Value | $816.17 |
| Metric | Value |
|---|---|
| Market Capitalization | $381M |
| Enterprise Value | $873M |
| Trailing P/E | 55.98 |
| Forward P/E | 55.98 |
| Trailing EV/EBITDA | 5.40 |
| Current Dividend Yield | 244.73% |
| Dividend Growth Rate (5Y) | -12.31% |
| Debt-to-Equity Ratio | 1.54 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 37% | $54.97 |
| Discounted Cash Flow (5Y) | 31% | $44.09 |
| Dividend Discount Model (Stable) | 19% | $7.75 |
| Earnings Power Value | 12% | $81.62 |
| Weighted Average | 100% | $235.53 |
Based on our comprehensive valuation analysis, DFS Furniture PLC's weighted average intrinsic value is $235.53, which is approximately 41.5% above the current market price of $166.50.
Key investment considerations:
Given these factors, we believe DFS Furniture PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.