What is TCS's DCF valuation?

Container Store Group Inc (TCS) DCF Valuation Analysis

Executive Summary

As of December 15, 2025, Container Store Group Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $2.65, this represents a potential upside of -68483.0%.

Key Metrics Value
DCF Fair Value (5-year) $0.00
DCF Fair Value (10-year) $0.00
Potential Upside (5-year) -138855.0%
Potential Upside (10-year) -68483.0%
Discount Rate (WACC) 5.6% - 7.0%

Financial Performance & Projections

Revenue Trends

Revenue is projected to grow from $848 million in 03-2024 to $1002 million by 03-2034, representing a compound annual growth rate of approximately 1.7%.

Fiscal Year Revenue (USD millions) Growth
03-2024 848 19%
03-2025 778 -8%
03-2026 798 2%
03-2027 826 4%
03-2028 870 5%
03-2029 887 2%
03-2030 920 4%
03-2031 945 3%
03-2032 964 2%
03-2033 983 2%
03-2034 1002 2%

Profitability Projections

Net profit margin is expected to improve from -12% in 03-2024 to -3% by 03-2034, driven by operational efficiency and economies of scale.

Fiscal Year Net Profit (USD millions) Profit Margin
03-2024 (103) -12%
03-2025 (71) -9%
03-2026 (62) -8%
03-2027 (52) -6%
03-2028 (44) -5%
03-2029 (34) -4%
03-2030 (33) -4%
03-2031 (31) -3%
03-2032 (30) -3%
03-2033 (28) -3%
03-2034 (26) -3%

DCF Model Components

1. Capital Expenditures (CapEx)

with a 5-year average of $38 million. Projected CapEx is expected to maintain at approximately 4% of revenue.

2. Depreciation & Amortization

Depreciation is based on an average useful life of 5 years for capital assets.

Fiscal Year D&A (USD millions)
03-2025 37
03-2026 40
03-2027 39
03-2028 33
03-2029 32
03-2030 33

3. Working Capital Requirements

Net working capital is expected to increase gradually, with projected changes affecting free cash flow.

Components Average Days
Days Receivables 6
Days Inventory 151
Days Payables 57

4. Free Cash Flow Projections

Fiscal Year EBITDA Tax CapEx Change in NWC FCF
6M/2025 (21) (14) 15 (9) (14)
2026 (26) (23) 31 0 (34)
2027 (13) (20) 32 (1) (24)
2028 (6) (17) 34 0 (23)
2029 7 (13) 34 (2) (12)

DCF Valuation Parameters

Key Assumptions

  • Discount Rate (WACC): WACC / Discount Rate (selected: 5.6% - 7.0%)
  • Long-Term Growth Rate: Long-term Growth Rate (selected: 3.0% - 5.0%)
  • Terminal EV/EBITDA Multiple: 7.2x (based on peer average)

Valuation Summary

Valuation Method Fair Price (USD) Potential Upside
5-Year DCF (Growth) 0.00 -138855.0%
10-Year DCF (Growth) 0.00 -68483.0%
5-Year DCF (EBITDA) 0.00 -100.0%
10-Year DCF (EBITDA) 0.00 -100.0%

Enterprise Value Breakdown

  • 5-Year Model: $(792)M
  • 10-Year Model: $(306)M

Investment Conclusion

Is Container Store Group Inc (TCS) a buy or a sell? Container Store Group Inc is definitely a sell. Based on our DCF analysis, Container Store Group Inc (TCS) appears to be overvalued with upside potential of -68483.0%. 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:

  • Expanding profit margins (from -12% to -3%)
  • Steady revenue growth (1.7% CAGR)
  • Strong free cash flow generation

Investors should consider reducing exposure at the current market price of $2.65.