Is Williams Companies Inc (WMB) overvalued?
On Equity Rank's model estimate, WMB trades 55% above its fair value. Williams Companies Inc (WMB) last closed at $64.08; the multi-method model fair value is $41.44.
| Price | Model fair value | Price vs model |
|---|---|---|
| $64.08 | $41.44 | 55% above |
What the answer rests on
- 1 of 11 valuation methods put WMB's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, WMB's free cash flow would need to grow about 21.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -27.2% a year.
- WMB trades at 26.7 times its last year's earnings, against a median of 14.8 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 37% above to 252% 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 WMB's fair value · What prices assume · Other companies