As of June 22, 2025, Houston Wire & Cable Co's estimated intrinsic value ranges from $0.27 to $25.34 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $3.45 | -34.9% |
| Discounted Cash Flow (5Y) | $0.27 | -95.0% |
| Dividend Discount Model (Multi-Stage) | $1.93 | -63.6% |
| Earnings Power Value | $25.34 | +378.0% |
Is Houston Wire & Cable Co (HWCC) undervalued or overvalued?
With the current market price at $5.30, the stock appears to be moderately 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 Houston Wire & Cable 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 | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.9 | 1.13 |
| Cost of equity | 7.0% | 10.1% |
| Cost of debt | 4.0% | 7.0% |
| Tax rate | 20.7% | 26.8% |
| Debt/Equity ratio | 0.37 | 0.37 |
| After-tax WACC | 5.9% | 8.8% |
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 | $0 | $26M | 78.5% |
| 10-Year Growth | $3 | $80M | 70.3% |
| 5-Year EBITDA | $2 | $61M | 91.0% |
| 10-Year EBITDA | $4 | $91M | 73.9% |
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 | $32M |
| Discount Rate (WACC) | 8.8% - 5.9% |
| Enterprise Value | $363M - $535M |
| Net Debt | $21M |
| Equity Value | $342M - $514M |
| Outstanding Shares | 17M |
| Fair Value | $20 - $30 |
| Selected Fair Value | $25.34 |
| Metric | Value |
|---|---|
| Market Capitalization | $89M |
| Enterprise Value | $111M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 10.45 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.37 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $1.03 |
| Discounted Cash Flow (5Y) | 29% | $0.07 |
| Dividend Discount Model (Multi-Stage) | 24% | $0.39 |
| Earnings Power Value | 12% | $2.53 |
| Weighted Average | 100% | $4.73 |
Based on our comprehensive valuation analysis, Houston Wire & Cable Co's weighted average intrinsic value is $4.73, which is approximately 10.8% below the current market price of $5.30.
Key investment considerations:
Given these factors, we believe Houston Wire & Cable Co is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.