As of June 2, 2025, Hilton Worldwide Holdings Inc's estimated intrinsic value ranges from $59.89 to $394.27 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $394.27 | +58.7% |
| Discounted Cash Flow (5Y) | $290.98 | +17.1% |
| Dividend Discount Model (Multi-Stage) | $190.15 | -23.5% |
| Dividend Discount Model (Stable) | $135.93 | -45.3% |
| Earnings Power Value | $59.89 | -75.9% |
Is Hilton Worldwide Holdings Inc (HLT) undervalued or overvalued?
With the current market price at $248.44, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hilton Worldwide Holdings 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 | 0.76 | 0.84 |
| Cost of equity | 7.4% | 9.6% |
| Cost of debt | 4.9% | 5.3% |
| Tax rate | 25.2% | 27.4% |
| Debt/Equity ratio | 0.19 | 0.19 |
| After-tax WACC | 6.8% | 8.7% |
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 | $291 | $79,588M | 83.7% |
| 10-Year Growth | $394 | $104,139M | 71.3% |
| 5-Year EBITDA | $192 | $56,040M | 76.8% |
| 10-Year EBITDA | $280 | $77,014M | 61.2% |
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 | $1,878M |
| Discount Rate (WACC) | 8.7% - 6.8% |
| Enterprise Value | $21,626M - $27,686M |
| Net Debt | $10,421M |
| Equity Value | $11,205M - $17,265M |
| Outstanding Shares | 238M |
| Fair Value | $47 - $73 |
| Selected Fair Value | $59.89 |
| Metric | Value |
|---|---|
| Market Capitalization | $59054M |
| Enterprise Value | $69475M |
| Trailing P/E | 37.61 |
| Forward P/E | 36.38 |
| Trailing EV/EBITDA | 10.95 |
| Current Dividend Yield | 25.06% |
| Dividend Growth Rate (5Y) | 37.47% |
| Debt-to-Equity Ratio | 0.19 |
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% | $118.28 |
| Discounted Cash Flow (5Y) | 25% | $72.75 |
| Dividend Discount Model (Multi-Stage) | 20% | $38.03 |
| Dividend Discount Model (Stable) | 15% | $20.39 |
| Earnings Power Value | 10% | $5.99 |
| Weighted Average | 100% | $255.43 |
Based on our comprehensive valuation analysis, Hilton Worldwide Holdings Inc's weighted average intrinsic value is $255.43, which is approximately 2.8% above the current market price of $248.44.
Key investment considerations:
Given these factors, we believe Hilton Worldwide Holdings Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.