Graham Holdings Company (GHC)
Valuation Overview•Is Graham Holdings Company Overvalued or Undervalued?
Trading at a discount to intrinsic cash flow value, implying pessimistic long-term market expectations.
Fragile underlying quality score of 44/100; weak margins or elevated debt leverage warrant caution.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street sentiment is generally neutral. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
GHC struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (7.8% 3Y CAGR) paired with highly explosive earnings growth (68.9% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 7.1%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $0.00 | +2.5% | +7.8% | +11.2% | +6.6% | |
| EBITDA | $57.8M | — | +0.9% | — | — | |
| Net Income | $29.1M | -59.7% | +63.3% | — | — | |
| EPS (Diluted) | $4396.68 | -59.3% | +68.9% | +2.7% | — | |
| Free Cash Flow | $48.6M | -17.4% | +20.5% | +13.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 27.7% | 29.3% | 30.8% | 35.5% |
| Operating Margin | 7.1% | 3.7% | 3.2% | 4.8% |
| Net Margin | 7.9% | 8.6% | 7.7% | 8.9% |
| FCF Margin | 7.6% | 5.3% | 4.2% | 5.1% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $13.11 | $16.79 | +28.1% | ||
| Q1'26 | $14.05 | $11.45 | -18.5% | ||
| Q4'25 | $14.05 | $14.08 | +0.2% | ||
| Q3'25 | $12.36 | $14.33 | +15.9% | ||
| Q2'25 | $11.29 | $11.64 | +3.1% | ||
| Q1'25 | $22.12 | $22.58 | +2.1% | ||
| Q4'24 | $15.31 | $17.25 | +12.7% | ||
| Q3'24 | $8.74 | $12.70 | +45.3% |
Total return is +20.5% (1Y), lagging the benchmark by -4.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +5.6% | -3.7% | — |
| 1Y | +20.5% | -4.5% | +0.8% |
| 3YCAGR | +27.0% | +6.8% | +3.7% |
| 5YCAGR | +12.9% | +0.2% | +5.3% |
| 10YCAGR | +9.2% | -4.4% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Graham Holdings Company (GHC) valuation, health, and returns.
Graham Holdings Company is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. undervalued (implying +40.0% upside to DCF intrinsic value of $1602.18)
Graham Holdings Company has multiple valuation anchors: DCF Intrinsic Value: $1602.18 | Peer Relative Fair Value: $1136.11. A convergence of these signals offers higher conviction.
Graham Holdings Company displays fair financial health with a composite quality score of 44/100, supported by a Altman Z-Score of 2.6 (grey zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 3.3%.
Graham Holdings Company pays a 0.6% dividend yield, covered by a 11% payout ratio with 11 years of growth, supplemented by a 0.1% buyback yield.
Graham Holdings Company's current growth trajectory is Decelerating. The company achieved +2.5% 1Y revenue growth and -59.3% 1Y EPS growth, compared to its 3Y revenue CAGR of +7.8%.
Wall Street consensus is Hold based on 0 analysts, beating EPS expectations in 83% of recent quarters with a 1-quarter streak. The consensus price target represents a N/A change from current levels.
Investment risks for Graham Holdings Company include: -19.8% 1-year max drawdown. Volatility risk is characterized by a beta of 0.73x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.