As of June 10, 2025, WD-40 Co's estimated intrinsic value ranges from $81.00 to $362.77 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $362.77 | +49.1% |
| Discounted Cash Flow (5Y) | $284.37 | +16.9% |
| Dividend Discount Model (Multi-Stage) | $250.59 | +3.0% |
| Dividend Discount Model (Stable) | $230.48 | -5.3% |
| Earnings Power Value | $81.00 | -66.7% |
Is WD-40 Co (WDFC) undervalued or overvalued?
With the current market price at $243.26, the stock appears to be moderately 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 WD-40 Co'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 | 0.36 | 0.4 |
| Cost of equity | 5.5% | 7.1% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 19.8% | 21.0% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 5.5% | 7.0% |
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 | $284 | $3,915M | 87.6% |
| 10-Year Growth | $363 | $4,978M | 77.2% |
| 5-Year EBITDA | $148 | $2,070M | 76.5% |
| 10-Year EBITDA | $210 | $2,911M | 61.1% |
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 | $71M |
| Discount Rate (WACC) | 7.0% - 5.5% |
| Enterprise Value | $1,016M - $1,304M |
| Net Debt | $62M |
| Equity Value | $953M - $1,242M |
| Outstanding Shares | 14M |
| Fair Value | $70 - $92 |
| Selected Fair Value | $81.00 |
| Metric | Value |
|---|---|
| Market Capitalization | $3296M |
| Enterprise Value | $3358M |
| Trailing P/E | 38.60 |
| Forward P/E | 36.22 |
| Trailing EV/EBITDA | 10.25 |
| Current Dividend Yield | 146.28% |
| Dividend Growth Rate (5Y) | 6.98% |
| Debt-to-Equity Ratio | 0.03 |
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% | $108.83 |
| Discounted Cash Flow (5Y) | 25% | $71.09 |
| Dividend Discount Model (Multi-Stage) | 20% | $50.12 |
| Dividend Discount Model (Stable) | 15% | $34.57 |
| Earnings Power Value | 10% | $8.10 |
| Weighted Average | 100% | $272.71 |
Based on our comprehensive valuation analysis, WD-40 Co's weighted average intrinsic value is $272.71, which is approximately 12.1% above the current market price of $243.26.
Key investment considerations:
Given these factors, we believe WD-40 Co is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.