DavidsTea Inc. provides a selection of loose-leaf teas, pre-packaged teas, tea sachets, and tea-related gifts and accessories in Canada and the United States through its retail stores. The company was founded in 2008 and is based in Montreal, Canada.
DTEA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for DAVIDsTEA Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that DAVIDsTEA Inc ranked in the 94th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 4700.67% on a DCF basis. The most interesting components of our discounted cash flow analysis for DAVIDsTEA Inc ended up being:
The company has produced more trailing twelve month cash flow than just 21.63% of its sector Consumer Defensive.
21% of the company's capital comes from equity, which is greater than merely 8.89% of stocks in our cash flow based forecasting set.
DAVIDsTEA Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -9.74. This coverage rate is greater than that of merely 8.5% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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* DAVIDsTEA plans to reopen 18 Canadian stores under new, more favourable lease terms * DAVIDsTEA to focus on its expanding online business at www.davidstea.com and sales in grocery stores and pharmacies across Canada * Exiting 82 remaining Canadian stores * Execution of business plan significantly accelerated under CCAA restructuringMONTREAL, July 30, 2020 (GLOBE NEWSWIRE) -- DAVIDsTEA Inc. (Nasdaq:DTEA) (“DAVIDsTEA” or the “Company”), a leading tea merchant in North America, announces that as part of its restructuring plan under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”), it plans to reopen 18 stores in Canada under new, more favourable lease terms and conditions.“We believe that a select group of our best-performing stores, complementing our growing onl...