ARHS
Arhaus, Inc.
$7.90
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 16.3% above fair value
You pay
$7.90
Bear
$3.92
Fair
$6.79
Bull
$9.78
Bear
$3.92
-50.3%
8% stage 1 growth, 12% discount
Fair
$6.79
-14.1%
13% stage 1 growth, 12% discount
Bull
$9.78
+23.8%
16% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
27.7x
Market is pricing in (growth)
15.3%
vs 12.6% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $9.79 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $6.79 per share.
Warnings
Wall Street's average price target is $9.79 (from 14 analysts). Our estimate is 38% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions