As of May 23, 2025, William Hill PLC's estimated intrinsic value ranges from $44.08 to $1267.81 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $185.65 | -31.7% |
| Discounted Cash Flow (5Y) | $185.48 | -31.8% |
| Dividend Discount Model (Multi-Stage) | $115.28 | -57.6% |
| Dividend Discount Model (Stable) | $44.08 | -83.8% |
| Earnings Power Value | $1267.81 | +366.4% |
Is William Hill PLC (WMH.L) undervalued or overvalued?
With the current market price at $271.80, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate William Hill 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 | 0.84 | 1.06 |
| Cost of equity | 7.4% | 10.7% |
| Cost of debt | 5.2% | 8.9% |
| Tax rate | 2.0% | 5.4% |
| Debt/Equity ratio | 0.28 | 0.28 |
| After-tax WACC | 6.9% | 10.2% |
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 | $185 | $2,076M | 78.0% |
| 10-Year Growth | $186 | $2,077M | 60.7% |
| 5-Year EBITDA | $108 | $1,254M | 63.6% |
| 10-Year EBITDA | $127 | $1,448M | 43.6% |
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 | $1,122M |
| Discount Rate (WACC) | 10.2% - 6.9% |
| Enterprise Value | $11,050M - $16,185M |
| Net Debt | $98M |
| Equity Value | $10,952M - $16,088M |
| Outstanding Shares | 11M |
| Fair Value | $1,027 - $1,509 |
| Selected Fair Value | $1267.81 |
| Metric | Value |
|---|---|
| Market Capitalization | $2898M |
| Enterprise Value | $2996M |
| Trailing P/E | 88.37 |
| Forward P/E | 55.67 |
| Trailing EV/EBITDA | 5.70 |
| Current Dividend Yield | 313.62% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.28 |
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% | $55.69 |
| Discounted Cash Flow (5Y) | 25% | $46.37 |
| Dividend Discount Model (Multi-Stage) | 20% | $23.06 |
| Dividend Discount Model (Stable) | 15% | $6.61 |
| Earnings Power Value | 10% | $126.78 |
| Weighted Average | 100% | $258.52 |
Based on our comprehensive valuation analysis, William Hill PLC's weighted average intrinsic value is $258.52, which is approximately 4.9% below the current market price of $271.80.
Key investment considerations:
Given these factors, we believe William Hill PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.