As of May 23, 2025, Rite Aid Corp has a Discounted Cash Flow (DCF) derived fair value of $118.32 per share. With the current market price at $0.65, this represents a potential upside of 18150.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $78.89 |
| DCF Fair Value (10-year) | $118.32 |
| Potential Upside (5-year) | 12068.8% |
| Potential Upside (10-year) | 18150.9% |
| Discount Rate (WACC) | 5.9% - 17.6% |
Revenue is projected to grow from $24092 million in 03-2023 to $27063 million by 03-2033, representing a compound annual growth rate of approximately 1.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2023 | 24092 | 2% |
| 03-2024 | 22868 | -5% |
| 03-2025 | 21463 | -6% |
| 03-2026 | 23033 | 7% |
| 03-2027 | 23493 | 2% |
| 03-2028 | 24505 | 4% |
| 03-2029 | 25002 | 2% |
| 03-2030 | 25502 | 2% |
| 03-2031 | 26012 | 2% |
| 03-2032 | 26532 | 2% |
| 03-2033 | 27063 | 2% |
Net profit margin is expected to improve from -3% in 03-2023 to 4% by 03-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2023 | (750) | -3% |
| 03-2024 | (306) | -1% |
| 03-2025 | 6 | 0% |
| 03-2026 | 314 | 1% |
| 03-2027 | 628 | 3% |
| 03-2028 | 970 | 4% |
| 03-2029 | 989 | 4% |
| 03-2030 | 1009 | 4% |
| 03-2031 | 1029 | 4% |
| 03-2032 | 1050 | 4% |
| 03-2033 | 1071 | 4% |
with a 5-year average of $230 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2024 | 227 |
| 03-2025 | 227 |
| 03-2026 | 228 |
| 03-2027 | 230 |
| 03-2028 | 229 |
| 03-2029 | 234 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 20 |
| Days Inventory | 36 |
| Days Payables | 28 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2024 | 66 | (34) | 170 | 49 | (119) |
| 2025 | 433 | 1 | 213 | (159) | 378 |
| 2026 | 803 | 47 | 229 | 85 | 442 |
| 2027 | 1172 | 94 | 234 | 52 | 791 |
| 2028 | 1573 | 146 | 244 | 47 | 1137 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 78.89 | 12068.8% |
| 10-Year DCF (Growth) | 118.32 | 18150.9% |
| 5-Year DCF (EBITDA) | 67.83 | 10336.1% |
| 10-Year DCF (EBITDA) | 100.80 | 15407.8% |
Is Rite Aid Corp (RAD) a buy or a sell? Rite Aid Corp is definitely a buy. Based on our DCF analysis, Rite Aid Corp (RAD) appears to be significantly undervalued with upside potential of 18150.9%. 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 $0.65.