DCF Tool

SBH

Sally Beauty Holdings Inc – Cosmetics, Beauty Supplies, and Perfume Stores
Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with revenues of approximately $3.9 billion annually. Through the Sally Beauty Supply and Beauty Systems Group businesses, the Company sells and distributes through 5,062 stores, including 158 franchised units, and has operations throughout the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain and Germany. Sally Beauty Supply stores offer up to 8,000 products for hair color, hair care, skin care, and nails through proprietary brands such as Ion®, Generic Value Products®, Beyond the Zone® and Silk Elements® as well as professional lines such as Wella®, Clairol®, OPI®, Conair® and Hot Shot Tools®. Beauty Systems Group stores, branded as CosmoProf® or Armstrong McCall® stores, along with its outside sales consultants, sell up to 10,500 professionally branded products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico® and CHI®, intended for use in salons and for resale by salons to retail consumers.
Analysis Results
Intrinsic Value $47.58
Latest Price $11.27
Relative Value 76% undervalued
Thoughts on this result? Let us know.
Ad
Cash Flow (Millions)
Analysis Parameters
%
%
%
New Ticker
Ad
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -1.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -1.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 317 295
2023 311 271
2024 306 249
2025 301 228
2026 296 209
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 5820 million. This corresponds to a present value of 3840 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1250 million. Adding in the terminal value gives a total present value of 5090 million.

There are presently 107.0 million outstanding shares, so the intrinsic value per share is 47.58.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,383,575,000
Current Cash 400,959,000
Current Liabilities 664,881,000
Current Debt 194,000
Non-Cash Working Capital (NCWC) 317,929,000
Change in NCWC -37,835,000
EBIT 423,054,000
Tax Provision 85,076,000
Depreciation and Amortization 102,201,000
Capital Expenditure -73,904,000
Unlevered Free Cash Flow 302,749,684
Current Assets 1,433,097,000
Current Cash 514,151,000
Current Liabilities 563,362,000
Current Debt 180,000
Non-Cash Working Capital (NCWC) 355,764,000
Change in NCWC -280,216,000
EBIT 272,785,000
Tax Provision 46,722,000
Depreciation and Amortization 106,779,000
Capital Expenditure -110,858,000
Unlevered Free Cash Flow -91,183,062
Current Assets 1,163,553,000
Current Cash 71,495,000
Current Liabilities 456,079,000
Current Debt 1,000
Non-Cash Working Capital (NCWC) 635,980,000
Change in NCWC 43,864,000
EBIT 457,791,000
Tax Provision 90,541,000
Depreciation and Amortization 107,658,000
Capital Expenditure -107,755,000
Unlevered Free Cash Flow 387,110,250
Current Assets 1,155,083,000
Current Cash 77,295,000
Current Liabilities 491,173,000
Current Debt 5,501,000
Non-Cash Working Capital (NCWC) 592,116,000
Change in NCWC -36,145,000
EBIT 460,204,000
Tax Provision 70,380,000
Depreciation and Amortization 108,829,000
Capital Expenditure -86,507,000
Unlevered Free Cash Flow 347,761,953
Current Assets 1,170,503,000
Current Cash 63,759,000
Current Liabilities 574,565,000
Current Debt 96,082,000
Non-Cash Working Capital (NCWC) 628,261,000
Change in NCWC 30,005,000
EBIT 501,276,000
Tax Provision 130,622,000
Depreciation and Amortization 112,323,000
Capital Expenditure -89,666,000
Unlevered Free Cash Flow 364,530,847
Current Assets 1,172,827,000
Current Cash 86,622,000
Current Liabilities 488,665,000
Current Debt 716,000
Non-Cash Working Capital (NCWC) 598,256,000
Change in NCWC 42,136,000
EBIT 498,297,000
Tax Provision 131,118,000
Depreciation and Amortization 99,657,000
Capital Expenditure -151,220,000
Unlevered Free Cash Flow 304,337,135
Current Assets 1,187,102,000
Current Cash 140,038,000
Current Liabilities 491,699,000
Current Debt 755,000
Non-Cash Working Capital (NCWC) 556,120,000
Change in NCWC 21,109,000
EBIT 495,326,000
Tax Provision 143,397,000
Depreciation and Amortization 89,391,000
Capital Expenditure -106,532,000
Unlevered Free Cash Flow 311,628,834
Current Assets 1,104,149,000
Current Cash 106,575,000
Current Liabilities 463,537,000
Current Debt 974,000
Non-Cash Working Capital (NCWC) 535,011,000
Change in NCWC 30,944,000
EBIT 506,996,000
Tax Provision 144,686,000
Depreciation and Amortization 79,663,000
Capital Expenditure -76,814,000
Unlevered Free Cash Flow 353,025,584
Current Assets 1,015,817,000
Current Cash 47,115,000
Current Liabilities 542,653,000
Current Debt 78,018,000
Non-Cash Working Capital (NCWC) 504,067,000
Change in NCWC 55,860,000
EBIT 520,362,000
Tax Provision 151,516,000
Depreciation and Amortization 72,192,000
Capital Expenditure -84,879,000
Unlevered Free Cash Flow 372,477,394
Current Assets 1,163,907,000
Current Cash 240,220,000
Current Liabilities 477,388,000
Current Debt 1,908,000
Non-Cash Working Capital (NCWC) 448,207,000
Change in NCWC 89,542,000
EBIT 499,355,000
Tax Provision 127,879,000
Depreciation and Amortization 64,698,000
Capital Expenditure -69,086,000
Unlevered Free Cash Flow 407,591,819

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.