As of May 27, 2025, Lamar Advertising Co has a Discounted Cash Flow (DCF) derived fair value of $148.91 per share. With the current market price at $115.31, this represents a potential upside of 29.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $135.12 |
| DCF Fair Value (10-year) | $148.91 |
| Potential Upside (5-year) | 17.2% |
| Potential Upside (10-year) | 29.1% |
| Discount Rate (WACC) | 6.1% - 7.9% |
Revenue is projected to grow from $2207 million in 12-2024 to $3244 million by 12-2034, representing a compound annual growth rate of approximately 3.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 2207 | 5% |
| 12-2025 | 2291 | 4% |
| 12-2026 | 2376 | 4% |
| 12-2027 | 2453 | 3% |
| 12-2028 | 2573 | 5% |
| 12-2029 | 2740 | 6% |
| 12-2030 | 2832 | 3% |
| 12-2031 | 2943 | 4% |
| 12-2032 | 3066 | 4% |
| 12-2033 | 3127 | 2% |
| 12-2034 | 3244 | 4% |
Net profit margin is expected to improve from 16% in 12-2024 to 21% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 363 | 16% |
| 12-2025 | 395 | 17% |
| 12-2026 | 430 | 18% |
| 12-2027 | 464 | 19% |
| 12-2028 | 507 | 20% |
| 12-2029 | 560 | 20% |
| 12-2030 | 583 | 21% |
| 12-2031 | 610 | 21% |
| 12-2032 | 639 | 21% |
| 12-2033 | 656 | 21% |
| 12-2034 | 685 | 21% |
with a 5-year average of $132 million. Projected CapEx is expected to maintain at approximately 7% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 150 |
| 12-2026 | 156 |
| 12-2027 | 156 |
| 12-2028 | 154 |
| 12-2029 | 166 |
| 12-2030 | 173 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 53 |
| Days Inventory | 0 |
| Days Payables | 19 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 542 | 6 | 115 | (2) | 423 |
| 2026 | 772 | 8 | 159 | 17 | 588 |
| 2027 | 811 | 9 | 164 | 14 | 624 |
| 2028 | 863 | 10 | 172 | 14 | 667 |
| 2029 | 941 | 11 | 183 | 26 | 721 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 135.12 | 17.2% |
| 10-Year DCF (Growth) | 148.91 | 29.1% |
| 5-Year DCF (EBITDA) | 83.91 | -27.2% |
| 10-Year DCF (EBITDA) | 100.09 | -13.2% |
Is Lamar Advertising Co (LAMR) a buy or a sell? Lamar Advertising Co is definitely a buy. Based on our DCF analysis, Lamar Advertising Co (LAMR) appears to be significantly undervalued with upside potential of 29.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $115.31.