As of May 27, 2025, SolarWinds Corp's estimated intrinsic value ranges from $8.13 to $19.09 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $19.09 | +3.3% |
| Discounted Cash Flow (5Y) | $16.68 | -9.8% |
| Dividend Discount Model (Multi-Stage) | $8.13 | -56.0% |
| Dividend Discount Model (Stable) | $10.54 | -43.0% |
| Earnings Power Value | $11.95 | -35.4% |
Is SolarWinds Corp (SWI) undervalued or overvalued?
With the current market price at $18.49, 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 SolarWinds Corp'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 | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.05 | 1.22 |
| Cost of equity | 8.7% | 11.7% |
| Cost of debt | 6.3% | 9.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.38 | 0.38 |
| After-tax WACC | 7.6% | 10.3% |
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 | $17 | $3,817M | 78.2% |
| 10-Year Growth | $19 | $4,231M | 62.9% |
| 5-Year EBITDA | $28 | $5,783M | 85.6% |
| 10-Year EBITDA | $29 | $5,993M | 73.8% |
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 | $263M |
| Discount Rate (WACC) | 10.3% - 7.6% |
| Enterprise Value | $2,546M - $3,463M |
| Net Debt | $955M |
| Equity Value | $1,591M - $2,508M |
| Outstanding Shares | 172M |
| Fair Value | $9 - $15 |
| Selected Fair Value | $11.95 |
| Metric | Value |
|---|---|
| Market Capitalization | $3173M |
| Enterprise Value | $4128M |
| Trailing P/E | 28.36 |
| Forward P/E | 38.84 |
| Trailing EV/EBITDA | 26.50 |
| Current Dividend Yield | 529.97% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.38 |
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% | $5.73 |
| Discounted Cash Flow (5Y) | 25% | $4.17 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.63 |
| Dividend Discount Model (Stable) | 15% | $1.58 |
| Earnings Power Value | 10% | $1.19 |
| Weighted Average | 100% | $14.30 |
Based on our comprehensive valuation analysis, SolarWinds Corp's weighted average intrinsic value is $14.30, which is approximately 22.7% below the current market price of $18.49.
Key investment considerations:
Given these factors, we believe SolarWinds Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.