- Wondering whether Flutter Entertainment at around US$106 per share still lines up with its underlying worth, or if the recent price leaves a margin of safety on the table.
- The stock has been choppy, with a 4.9% decline over the last week, a 3.3% gain over the past month, and year to date returns of a 51.4% decline, alongside a 1-year return of a 57.3% decline and 3-year and 5-year returns of 45.9% and 48.2% declines respectively.
- Recent coverage has focused on Flutter Entertainment’s position as a major online betting and gaming group and on how regulatory trends and market competition affect sentiment toward the stock. These themes help frame why the share price has been under pressure over longer periods, even though there have been shorter-term moves higher at times.
- On Simply Wall St’s valuation checks, Flutter Entertainment scores 5 out of 6. Next you will see how different valuation approaches line up and how an even richer way of thinking about value ties everything together by the end of the article.
Find out why Flutter Entertainment’s -57.3% return over the last year is lagging behind its peers.
Approach 1: Flutter Entertainment Discounted Cash Flow (DCF) Analysis
A DCF model estimates what a company could be worth by projecting its future cash flows and then discounting those amounts back to a single value in today’s dollars. It is essentially asking what all of Flutter Entertainment’s future cash generation is worth right now.
For Flutter Entertainment, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model based on cash flow projections in $. The latest twelve month free cash flow is about $394.4 million. Analyst inputs and extrapolated estimates point to free cash flow of around $3.10b by 2030, with a series of annual projections between 2026 and 2035 that are discounted back to present value.
On this basis, the model arrives at an estimated intrinsic value of about $255 per share, compared with a current share price close to $106. That implies the shares trade at roughly a 58.4% discount to this DCF estimate, which indicates a wide gap between the market price and the modelled value.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Flutter Entertainment is undervalued by 58.4%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.
Approach 2: Flutter Entertainment Price vs Sales
For companies where earnings can be volatile or influenced by non cash items, the P/S ratio is often a useful way to look at value because it compares the share price to the revenue the business generates. It is still shaped by what investors expect for future growth and how much risk they see, since higher growth and lower perceived risk usually support a higher “normal” or “fair” multiple.
Flutter Entertainment currently trades on a P/S of 1.13x. This sits below both the Hospitality industry average of 1.67x and the peer group average of 1.64x. Simply Wall St also provides a proprietary “Fair Ratio” of 2.82x for Flutter Entertainment, which is the P/S level that would be consistent with factors such as its growth profile, industry, profit margins, market cap and risk characteristics.
This Fair Ratio can be more informative than a simple comparison with peers or the industry, because it adjusts for company specific traits rather than assuming all operators deserve the same multiple. Comparing Flutter Entertainment’s current 1.13x P/S to the Fair Ratio of 2.82x suggests that the shares are trading below this modelled level.
Result: UNDERVALUED
P/S ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 18 top founder-led companies.
Upgrade Your Decision Making: Choose your Flutter Entertainment Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives take that next step by letting you spell out your story for Flutter Entertainment, link it to a specific forecast for revenue, earnings and margins, and then turn that into a Fair Value you can compare with the current price.
On Simply Wall St’s Community page, Narratives are an easy tool used by millions of investors. You pick assumptions, attach your reasoning, and see a Fair Value that updates automatically when new information such as earnings, guidance or regulatory news comes through.
For Flutter Entertainment, one investor might build an optimistic Narrative close to the bullish Fair Value of about US$369.27 per share based on expectations for faster growth and higher margins. Another might anchor to a more cautious Fair Value near US$187.54 or US$226.48. By comparing each Fair Value with the current price you can decide for yourself whether the stock looks expensive, cheap or roughly in line with your own view.
Do you think there’s more to the story for Flutter Entertainment? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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