As of May 22, 2025, Eagle Materials Inc's estimated intrinsic value ranges from $142.69 to $341.51 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $341.51 | +59.0% |
| Discounted Cash Flow (5Y) | $270.39 | +25.9% |
| Dividend Discount Model (Multi-Stage) | $220.83 | +2.8% |
| Dividend Discount Model (Stable) | $187.29 | -12.8% |
| Earnings Power Value | $142.69 | -33.6% |
Is Eagle Materials Inc (EXP) undervalued or overvalued?
With the current market price at $214.74, the stock appears to be moderately 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 Eagle Materials 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 | 0.84 | 1.02 |
| Cost of equity | 7.7% | 10.6% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 21.4% | 22.0% |
| Debt/Equity ratio | 0.14 | 0.14 |
| After-tax WACC | 7.2% | 9.7% |
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 | $270 | $9,972M | 77.1% |
| 10-Year Growth | $342 | $12,339M | 59.7% |
| 5-Year EBITDA | $257 | $9,518M | 76.0% |
| 10-Year EBITDA | $326 | $11,817M | 57.9% |
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 | $473M |
| Discount Rate (WACC) | 9.7% - 7.2% |
| Enterprise Value | $4,864M - $6,577M |
| Net Debt | $971M |
| Equity Value | $3,894M - $5,607M |
| Outstanding Shares | 33M |
| Fair Value | $117 - $168 |
| Selected Fair Value | $142.69 |
| Metric | Value |
|---|---|
| Market Capitalization | $7149M |
| Enterprise Value | $8119M |
| Trailing P/E | 15.08 |
| Forward P/E | 13.62 |
| Trailing EV/EBITDA | 9.60 |
| Current Dividend Yield | 42.54% |
| Dividend Growth Rate (5Y) | 19.86% |
| Debt-to-Equity Ratio | 0.14 |
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% | $102.45 |
| Discounted Cash Flow (5Y) | 25% | $67.60 |
| Dividend Discount Model (Multi-Stage) | 20% | $44.17 |
| Dividend Discount Model (Stable) | 15% | $28.09 |
| Earnings Power Value | 10% | $14.27 |
| Weighted Average | 100% | $256.58 |
Based on our comprehensive valuation analysis, Eagle Materials Inc's weighted average intrinsic value is $256.58, which is approximately 19.5% above the current market price of $214.74.
Key investment considerations:
Given these factors, we believe Eagle Materials Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.