Waddell & Reed Financial provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. The company was founded in 1937 and is based in Overland Park, Kansas.
WDR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Waddell & Reed Financial Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Waddell & Reed Financial Inc ranked in the 55th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for WDR, they are:
Its compound free cash flow growth rate, as measured over the past 5.75 years, is -0.07% -- higher than only 19.37% of stocks in our DCF forecasting set.
WDR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 42.82% of tickers in our DCF set.
Relative to other stocks in its sector (Financial Services), Waddell & Reed Financial Inc has a reliance on debt greater than just 18.62% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
FSAM, SLF, AFL, BRK.B, and PTMN can be thought of as valuation peers to WDR, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
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