As of June 12, 2025, Woodward Inc's estimated intrinsic value ranges from $48.00 to $246.00 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $246.00 | +5.6% |
| Discounted Cash Flow (5Y) | $194.68 | -16.5% |
| Dividend Discount Model (Multi-Stage) | $159.34 | -31.6% |
| Dividend Discount Model (Stable) | $91.17 | -60.9% |
| Earnings Power Value | $48.00 | -79.4% |
Is Woodward Inc (WWD) undervalued or overvalued?
With the current market price at $233.05, 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 Woodward Inc'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 | 1.1 | 1.13 |
| Cost of equity | 8.9% | 11.2% |
| Cost of debt | 4.2% | 4.6% |
| Tax rate | 15.0% | 15.4% |
| Debt/Equity ratio | 0.06 | 0.06 |
| After-tax WACC | 8.6% | 10.8% |
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 | $195 | $12,131M | 77.7% |
| 10-Year Growth | $246 | $15,185M | 61.0% |
| 5-Year EBITDA | $217 | $13,471M | 79.9% |
| 10-Year EBITDA | $268 | $16,505M | 64.1% |
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 | $326M |
| Discount Rate (WACC) | 10.8% - 8.6% |
| Enterprise Value | $3,019M - $3,789M |
| Net Debt | $548M |
| Equity Value | $2,471M - $3,241M |
| Outstanding Shares | 60M |
| Fair Value | $42 - $54 |
| Selected Fair Value | $48.00 |
| Metric | Value |
|---|---|
| Market Capitalization | $13866M |
| Enterprise Value | $14414M |
| Trailing P/E | 36.36 |
| Forward P/E | 27.78 |
| Trailing EV/EBITDA | 14.20 |
| Current Dividend Yield | 43.99% |
| Dividend Growth Rate (5Y) | 11.51% |
| Debt-to-Equity Ratio | 0.06 |
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% | $73.80 |
| Discounted Cash Flow (5Y) | 25% | $48.67 |
| Dividend Discount Model (Multi-Stage) | 20% | $31.87 |
| Dividend Discount Model (Stable) | 15% | $13.68 |
| Earnings Power Value | 10% | $4.80 |
| Weighted Average | 100% | $172.81 |
Based on our comprehensive valuation analysis, Woodward Inc's weighted average intrinsic value is $172.81, which is approximately 25.8% below the current market price of $233.05.
Key investment considerations:
Given these factors, we believe Woodward Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.