As of May 23, 2025, Datto Holding Corp's estimated intrinsic value ranges from $6.81 to $31.97 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $31.97 | -9.1% |
| Discounted Cash Flow (5Y) | $22.64 | -35.6% |
| Dividend Discount Model (Multi-Stage) | $8.98 | -74.5% |
| Dividend Discount Model (Stable) | $6.81 | -80.6% |
| Earnings Power Value | $8.28 | -76.5% |
Is Datto Holding Corp (MSP) undervalued or overvalued?
With the current market price at $35.18, 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 Datto Holding Corp'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 | 0.89 | 1.55 |
| Cost of equity | 7.0% | 12.3% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 17.1% | 20.0% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 5.1% | 8.0% |
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 | $23 | $3,549M | 89.8% |
| 10-Year Growth | $32 | $5,091M | 82.0% |
| 5-Year EBITDA | $37 | $6,092M | 94.1% |
| 10-Year EBITDA | $47 | $7,847M | 88.3% |
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 | $73M |
| Discount Rate (WACC) | 8.0% - 5.1% |
| Enterprise Value | $923M - $1,431M |
| Net Debt | $(191)M |
| Equity Value | $1,115M - $1,622M |
| Outstanding Shares | 165M |
| Fair Value | $7 - $10 |
| Selected Fair Value | $8.28 |
| Metric | Value |
|---|---|
| Market Capitalization | $5812M |
| Enterprise Value | $5812M |
| Trailing P/E | 0.00 |
| Forward P/E | 88.59 |
| Trailing EV/EBITDA | 34.75 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.86 |
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% | $9.59 |
| Discounted Cash Flow (5Y) | 25% | $5.66 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.80 |
| Dividend Discount Model (Stable) | 15% | $1.02 |
| Earnings Power Value | 10% | $0.83 |
| Weighted Average | 100% | $18.90 |
Based on our comprehensive valuation analysis, Datto Holding Corp's weighted average intrinsic value is $18.90, which is approximately 46.3% below the current market price of $35.18.
Key investment considerations:
Given these factors, we believe Datto Holding Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.