As of June 1, 2025, Hill & Smith Holdings PLC's estimated intrinsic value ranges from $1173.41 to $1620.67 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1620.67 | -12.5% |
| Discounted Cash Flow (5Y) | $1457.12 | -21.3% |
| Dividend Discount Model (Multi-Stage) | $1173.41 | -36.6% |
| Dividend Discount Model (Stable) | $1203.12 | -35.0% |
| Earnings Power Value | $1381.83 | -25.4% |
Is Hill & Smith Holdings PLC (HILS.L) undervalued or overvalued?
With the current market price at $1852.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hill & Smith Holdings 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 | 0.88 |
| Cost of equity | 8.0% | 11.1% |
| Cost of debt | 4.7% | 5.6% |
| Tax rate | 26.6% | 29.1% |
| Debt/Equity ratio | 0.1 | 0.1 |
| After-tax WACC | 7.6% | 10.5% |
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 | $1,457 | $1,245M | 71.6% |
| 10-Year Growth | $1,621 | $1,375M | 52.9% |
| 5-Year EBITDA | $1,377 | $1,182M | 70.1% |
| 10-Year EBITDA | $1,610 | $1,366M | 52.6% |
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 | $104M |
| Discount Rate (WACC) | 10.5% - 7.6% |
| Enterprise Value | $996M - $1,376M |
| Net Debt | $90M |
| Equity Value | $905M - $1,285M |
| Outstanding Shares | 1M |
| Fair Value | $1,142 - $1,622 |
| Selected Fair Value | $1381.83 |
| Metric | Value |
|---|---|
| Market Capitalization | $1468M |
| Enterprise Value | $1558M |
| Trailing P/E | 19.21 |
| Forward P/E | 17.52 |
| Trailing EV/EBITDA | 7.50 |
| Current Dividend Yield | 235.03% |
| Dividend Growth Rate (5Y) | 42.36% |
| Debt-to-Equity Ratio | 0.10 |
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% | $486.20 |
| Discounted Cash Flow (5Y) | 25% | $364.28 |
| Dividend Discount Model (Multi-Stage) | 20% | $234.68 |
| Dividend Discount Model (Stable) | 15% | $180.47 |
| Earnings Power Value | 10% | $138.18 |
| Weighted Average | 100% | $1403.81 |
Based on our comprehensive valuation analysis, Hill & Smith Holdings PLC's weighted average intrinsic value is $1403.81, which is approximately 24.2% below the current market price of $1852.00.
Key investment considerations:
Given these factors, we believe Hill & Smith Holdings PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.