As of May 23, 2025, Pendragon PLC has a Discounted Cash Flow (DCF) derived fair value of $51.81 per share. With the current market price at $38.20, this represents a potential upside of 35.6%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $44.38 |
| DCF Fair Value (10-year) | $51.81 |
| Potential Upside (5-year) | 16.2% |
| Potential Upside (10-year) | 35.6% |
| Discount Rate (WACC) | 9.0% - 12.3% |
Revenue is projected to grow from $3620 million in 12-2022 to $5084 million by 12-2032, representing a compound annual growth rate of approximately 3.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2022 | 3620 | 6% |
| 12-2023 | 3917 | 8% |
| 12-2024 | 4145 | 6% |
| 12-2025 | 4265 | 3% |
| 12-2026 | 4357 | 2% |
| 12-2027 | 4444 | 2% |
| 12-2028 | 4550 | 2% |
| 12-2029 | 4641 | 2% |
| 12-2030 | 4734 | 2% |
| 12-2031 | 4922 | 4% |
| 12-2032 | 5084 | 3% |
Net profit margin is expected to improve from 1% in 12-2022 to 1% by 12-2032, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2022 | 45 | 1% |
| 12-2023 | 52 | 1% |
| 12-2024 | 55 | 1% |
| 12-2025 | 57 | 1% |
| 12-2026 | 58 | 1% |
| 12-2027 | 59 | 1% |
| 12-2028 | 61 | 1% |
| 12-2029 | 62 | 1% |
| 12-2030 | 63 | 1% |
| 12-2031 | 66 | 1% |
| 12-2032 | 68 | 1% |
with a 5-year average of $74 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2023 | 63 |
| 12-2024 | 57 |
| 12-2025 | 62 |
| 12-2026 | 75 |
| 12-2027 | 84 |
| 12-2028 | 87 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 7 |
| Days Inventory | 75 |
| Days Payables | 101 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2023 | 83 | 5 | 39 | (27) | 66 |
| 2024 | 166 | 10 | 83 | 17 | 57 |
| 2025 | 174 | 10 | 85 | (6) | 85 |
| 2026 | 190 | 11 | 87 | (11) | 104 |
| 2027 | 201 | 11 | 89 | 3 | 99 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 44.38 | 16.2% |
| 10-Year DCF (Growth) | 51.81 | 35.6% |
| 5-Year DCF (EBITDA) | 36.45 | -4.6% |
| 10-Year DCF (EBITDA) | 45.18 | 18.3% |
Is Pendragon PLC (PDG.L) a buy or a sell? Pendragon PLC is definitely a buy. Based on our DCF analysis, Pendragon PLC (PDG.L) appears to be significantly undervalued with upside potential of 35.6%. 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 $38.20.