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Arhaus, Inc. (ARHS)

Company Dividend Discount ModelIndustry: Home ImprovementSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$3.68 - $5.29$4.47
Multi-Stage$5.72 - $6.29$6.00
Blended Fair Value$5.23
Current Price$10.63
Upside-50.77%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202420232022202120202019
DPS0.00%0.00%0.500.000.000.440.000.000.000.000.000.00
YoY Growth--0.00%0.00%-100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--5.72%0.00%0.00%5.16%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)73.46
(-) Cash Dividends Paid (M)0.45
(=) Cash Retained (M)73.01
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)14.699.185.51
Cash Retained (M)73.0173.0173.01
(-) Cash Required (M)-14.69-9.18-5.51
(=) Excess Retained (M)58.3263.8367.50
(/) Shares Outstanding (M)141.12141.12141.12
(=) Excess Retained per Share0.410.450.48
LTM Dividend per Share0.000.000.00
(+) Excess Retained per Share0.410.450.48
(=) Adjusted Dividend0.420.460.48
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$3.68$4.47$5.29
Upside / Downside-65.41%-57.99%-50.21%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)73.4672.7372.0071.2870.5769.8671.96
Payout Ratio0.61%18.49%36.37%54.25%72.12%90.00%92.50%
Projected Dividends (M)0.4513.4526.1838.6750.8962.8766.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)12.2012.3312.45
Year 2 PV (M)21.5622.0022.45
Year 3 PV (M)28.8829.7830.69
Year 4 PV (M)34.5035.9337.40
Year 5 PV (M)38.6740.6842.78
PV of Terminal Value (M)671.26706.21742.61
Equity Value (M)807.06846.92888.37
Shares Outstanding (M)141.12141.12141.12
Fair Value$5.72$6.00$6.29
Upside / Downside-46.20%-43.54%-40.78%

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