As of May 27, 2025, US Foods Holding Corp's estimated intrinsic value ranges from $40.74 to $429.70 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $429.70 | +466.7% |
| Discounted Cash Flow (5Y) | $327.99 | +332.5% |
| Dividend Discount Model (Multi-Stage) | $216.42 | +185.4% |
| Dividend Discount Model (Stable) | $71.29 | -6.0% |
| Earnings Power Value | $40.74 | -46.3% |
Is US Foods Holding Corp (USFD) undervalued or overvalued?
With the current market price at $75.83, 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 US Foods Holding 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 | 0.41 | 0.7 |
| Cost of equity | 5.7% | 8.8% |
| Cost of debt | 4.9% | 5.3% |
| Tax rate | 23.3% | 24.2% |
| Debt/Equity ratio | 0.29 | 0.29 |
| After-tax WACC | 5.3% | 7.7% |
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 | $328 | $80,518M | 87.2% |
| 10-Year Growth | $430 | $103,964M | 75.8% |
| 5-Year EBITDA | $132 | $35,382M | 70.9% |
| 10-Year EBITDA | $207 | $52,546M | 52.1% |
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 | $896M |
| Discount Rate (WACC) | 7.7% - 5.3% |
| Enterprise Value | $11,613M - $16,989M |
| Net Debt | $4,910M |
| Equity Value | $6,703M - $12,079M |
| Outstanding Shares | 231M |
| Fair Value | $29 - $52 |
| Selected Fair Value | $40.74 |
| Metric | Value |
|---|---|
| Market Capitalization | $17480M |
| Enterprise Value | $22390M |
| Trailing P/E | 33.17 |
| Forward P/E | 17.18 |
| Trailing EV/EBITDA | 7.20 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.29 |
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% | $128.91 |
| Discounted Cash Flow (5Y) | 25% | $82.00 |
| Dividend Discount Model (Multi-Stage) | 20% | $43.28 |
| Dividend Discount Model (Stable) | 15% | $10.69 |
| Earnings Power Value | 10% | $4.07 |
| Weighted Average | 100% | $268.96 |
Based on our comprehensive valuation analysis, US Foods Holding Corp's weighted average intrinsic value is $268.96, which is approximately 254.7% above the current market price of $75.83.
Key investment considerations:
Given these factors, we believe US Foods Holding Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.