- If you are wondering whether Flutter Entertainment’s share price reflects its true worth today, it helps to start with how the stock has actually been performing.
- The shares last closed at US$111.57, with a 1.4% gain over the past week and 7.9% over the past month, set against a 48.9% decline year to date and a 52.1% decline over the last year.
- Recent coverage has focused on the sharp pullback in the share price and what it may signal about changing sentiment toward the business. This context matters for you as an investor because the market’s reaction can influence whether the current price lines up with different views of value.
- Simply Wall St assigns Flutter Entertainment a valuation score of 5 out of 6. The rest of this article will walk through how different valuation methods arrive at that view, before finishing with a broader way to think about what the current price really means for you.
Find out why Flutter Entertainment’s -52.1% return over the last year is lagging behind its peers.
Approach 1: Flutter Entertainment Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes estimates of the cash a business could generate in the future, then discounts those cash flows back to today to arrive at an estimate of what the business might be worth now.
For Flutter Entertainment, the model uses last twelve months free cash flow of about $394.4 million and a 2 Stage Free Cash Flow to Equity approach. Analyst estimates cover the next few years, then Simply Wall St extends those projections out to 2035. For example, free cash flow for 2030 is projected at $3.095b, with a series of annual projections between 2026 and 2035 that are discounted back to today using the DCF framework.
On this basis, the DCF model arrives at an estimated intrinsic value of about $244.17 per share, compared with the recent share price of $111.57. That implies the shares trade at a 54.3% discount to this cash flow based estimate.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Flutter Entertainment is undervalued by 54.3%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.
Approach 2: Flutter Entertainment Price vs Sales
For companies where earnings can be volatile or affected by non cash items, the P/S ratio is often a useful way to think about value because it anchors the price to the revenue the business generates rather than short term profit swings.
What counts as a reasonable P/S ratio usually depends on how quickly revenue is expected to grow and how risky the business is. Higher growth and lower perceived risk often support a higher multiple. Flutter Entertainment currently trades on a P/S of 1.18x, compared with the Hospitality industry average of about 1.64x and a peer group average of 1.64x.
Simply Wall St also calculates a proprietary “Fair Ratio” for Flutter Entertainment of 2.73x. This blends factors such as earnings growth, profit margins, industry classification, market cap and company specific risks. It can therefore give a more tailored view than simply lining the stock up against peers or the broad industry. Comparing the current 1.18x P/S with the 2.73x Fair Ratio suggests the shares are trading below the level implied by those fundamentals.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Flutter Entertainment Narrative
Earlier the article mentioned that there is an even better way to think about valuation, and on Simply Wall St this is done through Narratives. Narratives are your own story about a company that links a view on Flutter Entertainment’s business to specific forecasts for revenue, earnings and margins. These forecasts then flow into a fair value that you can compare with the current share price to help decide whether you see room to buy or a reason to wait or sell. All of this is contained within an accessible tool on the Community page that updates as fresh information like news or earnings arrives. For Flutter Entertainment, one investor might align with a more optimistic Narrative that points to a Fair Value around US$369.27, while another might lean toward a more cautious Narrative closer to US$188 or US$226.48. The gap between those views reflects how different assumptions about regulation, growth and profitability feed through to very different conclusions about what the shares are worth today.
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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