As of June 21, 2025, Hargreaves Lansdown PLC's estimated intrinsic value ranges from $669.13 to $871.95 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $823.52 | -25.7% |
| Discounted Cash Flow (5Y) | $714.86 | -35.5% |
| Dividend Discount Model (Multi-Stage) | $742.48 | -33.0% |
| Dividend Discount Model (Stable) | $669.13 | -39.6% |
| Earnings Power Value | $871.95 | -21.3% |
Is Hargreaves Lansdown PLC (HL.L) undervalued or overvalued?
With the current market price at $1108.50, 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 Hargreaves Lansdown 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 | 0.83 | 0.95 |
| Cost of equity | 9.0% | 11.6% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 19.4% | 19.7% |
| Debt/Equity ratio | 0 | 0 |
| After-tax WACC | 9.0% | 11.6% |
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 | $715 | $2,785M | 78.5% |
| 10-Year Growth | $824 | $3,301M | 55.3% |
| 5-Year EBITDA | $1,118 | $4,697M | 87.2% |
| 10-Year EBITDA | $1,180 | $4,994M | 70.4% |
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 | $357M |
| Discount Rate (WACC) | 11.6% - 9.0% |
| Enterprise Value | $3,074M - $3,988M |
| Net Debt | $(608)M |
| Equity Value | $3,682M - $4,596M |
| Outstanding Shares | 5M |
| Fair Value | $776 - $968 |
| Selected Fair Value | $871.95 |
| Metric | Value |
|---|---|
| Market Capitalization | $5262M |
| Enterprise Value | $4654M |
| Trailing P/E | 17.95 |
| Forward P/E | 16.11 |
| Trailing EV/EBITDA | 14.95 |
| Current Dividend Yield | 378.57% |
| Dividend Growth Rate (5Y) | -0.51% |
| Debt-to-Equity Ratio | 0.00 |
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% | $247.06 |
| Discounted Cash Flow (5Y) | 25% | $178.71 |
| Dividend Discount Model (Multi-Stage) | 20% | $148.50 |
| Dividend Discount Model (Stable) | 15% | $100.37 |
| Earnings Power Value | 10% | $87.19 |
| Weighted Average | 100% | $761.83 |
Based on our comprehensive valuation analysis, Hargreaves Lansdown PLC's weighted average intrinsic value is $761.83, which is approximately 31.3% below the current market price of $1108.50.
Key investment considerations:
Given these factors, we believe Hargreaves Lansdown PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.