Is Cintas Corporation (CTAS) overvalued?
On Equity Rank's model estimate, CTAS trades 60% above its fair value. Cintas Corporation (CTAS) last closed at $222.36; the multi-method model fair value is $139.45.
| Price | Model fair value | Price vs model |
|---|---|---|
| $222.36 | $139.45 | 60% above |
What the answer rests on
- 0 of 10 valuation methods put CTAS's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, CTAS's free cash flow would need to grow about 16.5% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 14.1% a year.
- CTAS trades at 45.2 times its last year's earnings, against a median of 24.8 for 187 profitable Industrials companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 19% above to 98% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind CTAS's fair value · What prices assume · Other companies