As of June 16, 2025, Renishaw PLC's estimated intrinsic value ranges from $1174.83 to $1981.98 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1981.98 | -26.7% |
| Discounted Cash Flow (5Y) | $1756.17 | -35.1% |
| Dividend Discount Model (Multi-Stage) | $1733.46 | -35.9% |
| Dividend Discount Model (Stable) | $1239.30 | -54.2% |
| Earnings Power Value | $1174.83 | -56.6% |
Is Renishaw PLC (RSW.L) undervalued or overvalued?
With the current market price at $2705.00, 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 Renishaw PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.08 | 1.12 |
| Cost of equity | 10.4% | 12.8% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 20.0% | 20.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| After-tax WACC | 10.4% | 12.7% |
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 | $1,756 | $1,173M | 68.0% |
| 10-Year Growth | $1,982 | $1,333M | 45.4% |
| 5-Year EBITDA | $3,591 | $2,474M | 84.8% |
| 10-Year EBITDA | $3,308 | $2,273M | 68.0% |
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 | $87M |
| Discount Rate (WACC) | 12.7% - 10.4% |
| Enterprise Value | $683M - $838M |
| Net Debt | $(73)M |
| Equity Value | $755M - $911M |
| Outstanding Shares | 1M |
| Fair Value | $1,065 - $1,284 |
| Selected Fair Value | $1174.83 |
| Metric | Value |
|---|---|
| Market Capitalization | $1918M |
| Enterprise Value | $1845M |
| Trailing P/E | 19.64 |
| Forward P/E | 17.19 |
| Trailing EV/EBITDA | 13.60 |
| Current Dividend Yield | 288.96% |
| Dividend Growth Rate (5Y) | 13.43% |
| Debt-to-Equity Ratio | 0.01 |
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% | $594.59 |
| Discounted Cash Flow (5Y) | 25% | $439.04 |
| Dividend Discount Model (Multi-Stage) | 20% | $346.69 |
| Dividend Discount Model (Stable) | 15% | $185.90 |
| Earnings Power Value | 10% | $117.48 |
| Weighted Average | 100% | $1683.71 |
Based on our comprehensive valuation analysis, Renishaw PLC's weighted average intrinsic value is $1683.71, which is approximately 37.8% below the current market price of $2705.00.
Key investment considerations:
Given these factors, we believe Renishaw PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.