What is REV's Intrinsic value?

Revlon Inc (REV) Intrinsic Value Analysis

Executive Summary

As of June 7, 2025, Revlon Inc's estimated intrinsic value ranges from $69.36 to $69.36 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $69.36 +1678.5%

Is Revlon Inc (REV) undervalued or overvalued?

With the current market price at $3.90, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Revlon Inc's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

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 4.2% 4.7%
Equity market risk premium 5.0% 6.0%
Adjusted beta 0.87 1.69
Cost of equity 8.5% 15.3%
Cost of debt 6.8% 18.2%
Tax rate 3.3% 4.0%
Debt/Equity ratio 3.53 3.53
After-tax WACC 7.0% 17.0%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $423M
Discount Rate (WACC) 17.0% - 7.0%
Enterprise Value $2,494M - $6,032M
Net Debt $498M
Equity Value $1,996M - $5,534M
Outstanding Shares 54M
Fair Value $37 - $102
Selected Fair Value $69.36

Key Financial Metrics

Metric Value
Market Capitalization $212M
Enterprise Value $710M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.40
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 3.53

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Earnings Power Value 100% $6.94
Weighted Average 100% $69.36

Investment Conclusion

Based on our comprehensive valuation analysis, Revlon Inc's weighted average intrinsic value is $69.36, which is approximately 1678.5% above the current market price of $3.90.

Key investment considerations:

  • Strong projected earnings growth (-34% to -21% margin)
  • Consistent cash flow generation

Given these factors, we believe Revlon Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.