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PROG Holdings, Inc. (PRG) Intrinsic Value

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

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PROG Holdings, Inc. (PRG)

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Intrinsic Value (DCF)

Current$32.11
→
Intrinsic$92.82
+189%
$59.10$92.82$156.80
Market implies 3% growth for 5 years
DCF analysis suggests PRG could have 189% upside at 25% growth — verify assumptions match your view.
At $32, the market prices in only 3% growth — below historical 25%, suggesting low expectations.
Range: Bear $59 → Bull $157. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$117$128$139$151
10%$78$85$93$101
12%$56$62$67$73
14%$43$47$51$56

Bull Case

  • Bull case ($157) offers 388% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (3%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($59) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$162.76M
Year 2$203.45M
Year 3$254.31M
Year 4$317.89M
Year 5$397.37M
Terminal$5.85B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$130.21MTTM 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 PRG stock undervalued or overvalued?
🟢 UNDERVALUED

PRG trades at $32.11 vs. our DCF-derived intrinsic value of $74.69, implying +146% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of PRG's future cash flows. The bear case ($44.57) still suggests upside, providing margin of safety.

What is PRG's intrinsic value?

Using a 5-year DCF model: Base FCF of $130M, projected at 25.0% 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 $559M net debt and dividing by 0.04B shares: Bear $44.57 | Base $74.69 | Bull $119.04. Current price $32.11 implies +146% to base case.

How is PRG's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% 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 ($3.81B).

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.