Is Kroger Company (KR) overvalued?
On Equity Rank's model estimate, KR trades 53% above its fair value. Kroger Company (KR) last closed at $67.70; the multi-method model fair value is $44.12.
| Price | Model fair value | Price vs model |
|---|---|---|
| $67.70 | $44.12 | 53% above |
What the answer rests on
- 1 of 10 valuation methods put KR's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, KR's free cash flow would need to grow about -6.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 39.5% a year.
- KR trades at 38.3 times its last year's earnings, against a median of 19.5 for 11 profitable Grocery companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 17% above to 72% 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 KR's fair value · What prices assume · Other companies