Office Depot, Inc. sells office supplies, technology products and solutions, business machines and related supplies, facilities products, and office furniture. The company was founded in 1986 and is based in Boca Raton, Florida.
ODP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for ODP Corp. To summarize, we found that ODP Corp ranked in the 88th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 1558.67% on a DCF basis. The most interesting components of our discounted cash flow analysis for ODP Corp ended up being:
52% of the company's capital comes from equity, which is greater than merely 24.92% of stocks in our cash flow based forecasting set.
ODP Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -3.21. This coverage rate is greater than that of merely 15.17% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, ODP Corp experienced a tax rate of about 0% over the past twelve months; relative to its sector (Consumer Cyclical), this tax rate is higher than merely 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
LCUT, WOW, TM, SKY, and BH can be thought of as valuation peers to ODP, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Image source Office supply retail hasn't exactly been the hot growth category in retail in, well, forever. The companies that compete in this space sell what amount to commodities, with no discernible competitive advantage. Indeed, office supplies are available at a variety of places and they all sell roughly the...
ODP Corp (ODP) Q2 2020 Earnings Conference Call August 05, 2020, 09:00 ET Company Participants Timothy Perrott - VP, IR Gerry Smith - CEO & Director Diego Scaglione - EVP & CFO Conference Call Participants Christopher McGinnis - Sidoti & Company Christopher Horvers - JPMorgan Chase & Co. Michael Lasser...