As of June 12, 2025, Studio Retail Group PLC's estimated intrinsic value ranges from $160.81 to $484.69 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $484.69 | +321.5% |
| Discounted Cash Flow (5Y) | $224.12 | +94.9% |
| Dividend Discount Model (Multi-Stage) | $160.81 | +39.8% |
| Dividend Discount Model (Stable) | $288.99 | +151.3% |
| Earnings Power Value | $190.08 | +65.3% |
Is Studio Retail Group PLC (STU.L) undervalued or overvalued?
With the current market price at $115.00, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Studio Retail Group 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 | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 2.66 | 2.87 |
| Cost of equity | 17.2% | 22.1% |
| Cost of debt | 4.3% | 4.5% |
| Tax rate | 8.4% | 15.2% |
| Debt/Equity ratio | 3.3 | 3.3 |
| After-tax WACC | 7.0% | 8.1% |
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 | $224 | $479M | 73.0% |
| 10-Year Growth | $485 | $707M | 57.1% |
| 5-Year EBITDA | $119 | $388M | 66.6% |
| 10-Year EBITDA | $284 | $532M | 43.1% |
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 | $34M |
| Discount Rate (WACC) | 8.1% - 7.0% |
| Enterprise Value | $417M - $482M |
| Net Debt | $284M |
| Equity Value | $133M - $198M |
| Outstanding Shares | 1M |
| Fair Value | $153 - $227 |
| Selected Fair Value | $190.08 |
| Metric | Value |
|---|---|
| Market Capitalization | $100M |
| Enterprise Value | $384M |
| Trailing P/E | 2.47 |
| Forward P/E | 3.03 |
| Trailing EV/EBITDA | 4.15 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 3.30 |
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% | $145.41 |
| Discounted Cash Flow (5Y) | 25% | $56.03 |
| Dividend Discount Model (Multi-Stage) | 20% | $32.16 |
| Dividend Discount Model (Stable) | 15% | $43.35 |
| Earnings Power Value | 10% | $19.01 |
| Weighted Average | 100% | $295.95 |
Based on our comprehensive valuation analysis, Studio Retail Group PLC's weighted average intrinsic value is $295.95, which is approximately 157.4% above the current market price of $115.00.
Key investment considerations:
Given these factors, we believe Studio Retail Group PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.