As of May 25, 2025, Herman Miller Inc has a Discounted Cash Flow (DCF) derived fair value of $69.39 per share. With the current market price at $38.92, this represents a potential upside of 78.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $62.89 |
| DCF Fair Value (10-year) | $69.39 |
| Potential Upside (5-year) | 61.6% |
| Potential Upside (10-year) | 78.3% |
| Discount Rate (WACC) | 6.8% - 8.9% |
Revenue is projected to grow from $2465 million in 05-2021 to $4023 million by 05-2031, representing a compound annual growth rate of approximately 5.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 05-2021 | 2465 | 1% |
| 05-2022 | 2908 | 18% |
| 05-2023 | 3211 | 10% |
| 05-2024 | 3275 | 2% |
| 05-2025 | 3341 | 2% |
| 05-2026 | 3408 | 2% |
| 05-2027 | 3476 | 2% |
| 05-2028 | 3676 | 6% |
| 05-2029 | 3793 | 3% |
| 05-2030 | 3869 | 2% |
| 05-2031 | 4023 | 4% |
Net profit margin is expected to improve from 7% in 05-2021 to 10% by 05-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 05-2021 | 179 | 7% |
| 05-2022 | 209 | 7% |
| 05-2023 | 257 | 8% |
| 05-2024 | 289 | 9% |
| 05-2025 | 322 | 10% |
| 05-2026 | 355 | 10% |
| 05-2027 | 362 | 10% |
| 05-2028 | 383 | 10% |
| 05-2029 | 395 | 10% |
| 05-2030 | 403 | 10% |
| 05-2031 | 419 | 10% |
with a 5-year average of $75 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 05-2022 | 76 |
| 05-2023 | 82 |
| 05-2024 | 84 |
| 05-2025 | 91 |
| 05-2026 | 100 |
| 05-2027 | 104 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 33 |
| Days Inventory | 46 |
| Days Payables | 37 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2022 | 294 | 70 | 68 | 34 | 122 |
| 2023 | 469 | 116 | 100 | 33 | 221 |
| 2024 | 518 | 130 | 102 | 4 | 282 |
| 2025 | 572 | 145 | 104 | 6 | 318 |
| 2026 | 630 | 160 | 106 | 6 | 358 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 62.89 | 61.6% |
| 10-Year DCF (Growth) | 69.39 | 78.3% |
| 5-Year DCF (EBITDA) | 32.04 | -17.7% |
| 10-Year DCF (EBITDA) | 42.44 | 9.1% |
Is Herman Miller Inc (MLHR) a buy or a sell? Herman Miller Inc is definitely a buy. Based on our DCF analysis, Herman Miller Inc (MLHR) appears to be significantly undervalued with upside potential of 78.3%. 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 $38.92.