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Mattel, Inc. (MAT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Mattel, Inc. (MAT)

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Intrinsic Value (DCF)

Current$21.75
→
Intrinsic$47.20
+117%
$30.96$47.20$78.04
Market implies 3% growth for 5 years
DCF analysis suggests MAT could have 117% upside at 20% growth — verify assumptions match your view.
At $22, the market prices in only 3% growth — below historical 20%, suggesting low expectations.
Range: Bear $31 → Bull $78. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →16%18%20%22%
8%$58$64$69$75
10%$40$43$47$51
12%$30$32$35$38
14%$23$25$27$30

Bull Case

  • Bull case ($78) offers 259% upside at 24% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (3%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($31) with 16% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$717.54M
Year 2$861.04M
Year 3$1.03B
Year 4$1.24B
Year 5$1.49B
Terminal$21.89B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$597.95MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is MAT stock undervalued or overvalued?
🟢 UNDERVALUED

MAT trades at $21.75 vs. our DCF-derived intrinsic value of $47.20, implying +122% upside. At a 10.0% WACC and 20.0% projected FCF growth, the market appears to be underpricing the present value of MAT's future cash flows. The bear case ($29.66) still suggests upside, providing margin of safety.

What is MAT's intrinsic value?

Using a 5-year DCF model: Base FCF of $598M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.30B net debt and dividing by 0.34B shares: Bear $29.66 | Base $47.20 | Bull $73.03. Current price $21.75 implies +122% to base case.

How is MAT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($17.50B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.