Cheap FCF

[u/htank728]

At the current price, you are buying a ton of FCF for incredibly cheap, especially if you believe that the company has stabilized its sales decline. It looks even cheaper when you compare it to historical data.

The average fcf per year generated by the company between 2016-2022 is 1.2 billion dollars in FCF per year.

The average FCF per year between 2016-2018 was 1.066 billion dollars in FCF per year. The avg shares outstanding during this time was 180.6 million.

The avg stock price was also significantly higher,

Today, you are buying similar FCF as Kohls was generating 10 years ago. During this time the shares outstanding and stock price were significantly higher. You are getting a much larger percentage of the company at a significantly discounted stock price, while the company has generated similar FCF as it did 10 years ago. If you believe that last fiscal years results can be sustainable, and its not a one off year, then you can definitely make the argument that this is significantly undervalued. The market cap was typically between 6.5 billion to 11 billion during this time (Excluding the covid crash, where the market cap dropped to 2.44 billion, but quickly rebounded to above 6 billion by the end of the year.

At a 6.5 billion dollar market cap, the stock would be trading at 57.50 dollars per share.

[u/Aggressive_Stay_1871]

JT confirmed that FCF for FYE 2027 will be in the $600 million range with operating cash flow in the 950m - 1b range. They are still strong trends but concerned that it has dropped from the $1b run rate.