As of May 22, 2025, Franklin Covey Co's estimated intrinsic value ranges from $32.49 to $49.15 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $49.15 | +114.3% |
| Discounted Cash Flow (5Y) | $44.71 | +95.0% |
| Dividend Discount Model (Multi-Stage) | $38.63 | +68.5% |
| Dividend Discount Model (Stable) | $36.87 | +60.8% |
| Earnings Power Value | $32.49 | +41.7% |
Is Franklin Covey Co (FC) undervalued or overvalued?
With the current market price at $22.93, 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 Franklin Covey Co'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 | 0.81 |
| Cost of equity | 6.6% | 9.4% |
| Cost of debt | 4.5% | 6.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.02 | 0.02 |
| After-tax WACC | 6.5% | 9.3% |
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 | $45 | $545M | 82.3% |
| 10-Year Growth | $49 | $602M | 67.4% |
| 5-Year EBITDA | $46 | $561M | 82.8% |
| 10-Year EBITDA | $51 | $620M | 68.4% |
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 | $30M |
| Discount Rate (WACC) | 9.3% - 6.5% |
| Enterprise Value | $317M - $455M |
| Net Debt | $(36)M |
| Equity Value | $353M - $491M |
| Outstanding Shares | 13M |
| Fair Value | $27 - $38 |
| Selected Fair Value | $32.49 |
| Metric | Value |
|---|---|
| Market Capitalization | $298M |
| Enterprise Value | $262M |
| Trailing P/E | 16.75 |
| Forward P/E | 11.97 |
| Trailing EV/EBITDA | 11.95 |
| Current Dividend Yield | 61.17% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.02 |
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% | $14.74 |
| Discounted Cash Flow (5Y) | 25% | $11.18 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.73 |
| Dividend Discount Model (Stable) | 15% | $5.53 |
| Earnings Power Value | 10% | $3.25 |
| Weighted Average | 100% | $42.43 |
Based on our comprehensive valuation analysis, Franklin Covey Co's weighted average intrinsic value is $42.43, which is approximately 85.0% above the current market price of $22.93.
Key investment considerations:
Given these factors, we believe Franklin Covey Co is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.