Kronos Worldwide Inc (KRO)

Market price: $7.70

3 valuation methods

What today’s price implies

This model grows free cash flow at the company's own recent rate of 2.6% a year for 3 years, then eases it down over the next 7 years to 2.5% — the rate a mature economy grows at, which is the standard ceiling for a perpetuity. For this DCF to equal today's price instead, free cash flow would have to grow 94.5% a year over that first 3-year period. That is the market's assumption, not ours.

How each method works

EV / Gross Profit: $3.69 to $11.44 (midpoint $4.28)

Values the business at a peer multiple of gross profit — useful where reported operating costs vary a lot across peers but gross economics are comparable.

How it’s calculated
We take last-twelve-month gross profit (revenue minus the direct cost of the goods or services sold), multiply it by the peer range of EV/Gross-Profit multiples, subtract net debt and any minority interests or preferred stock ranking ahead of common shareholders, and divide by shares outstanding.
Why it fits this industry
Gross profit sits between revenue and operating earnings: it credits the margin a company's products earn while ignoring overhead and investment choices that legitimately differ across peers.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together.

EV / Gross Profit = (4.59/4.89/8.48)× gross_profit 229,400,000 ≈ 1,053,868,776.06/1,121,028,743.38/1,946,022,971.29 (enterprise_value); enterprise_value -> per share: equity (425,068,776.06/492,228,743.38/1,317,222,971.29) / 115,097,516 shares [EV bridge: minus net debt 628,800,000]

P / B: $3.34 to $8.14 (midpoint $6.19)

Values the stock at a peer multiple of its book (net asset) value — most meaningful for asset-heavy and financial companies whose balance sheet drives value.

How it’s calculated
We take book value per share (total assets minus total liabilities, from the latest balance sheet, divided by shares outstanding) and multiply it by the range of price-to-book multiples the peer group trades at.
Why it fits this industry
Where the balance sheet is the business — lenders, insurers, asset-heavy operators — the price the market pays for a dollar of net assets is a natural yardstick.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. Asset-light companies (brands, software) legitimately trade far above book value, so for them a P/B bar well below the price is usually structure, not signal.

P / B = (0.51/0.95/1.25)× book_value_per_share 6.52 ≈ 3.34/6.19/8.14 (per_share)

EV / Revenue: $11.72 to $15.93 (midpoint $14.65)

Values the whole business at a peer multiple of sales — used when earnings are thin, volatile, or not yet meaningful, so revenue is the most reliable yardstick.

How it’s calculated
We multiply the company's last-twelve-month revenue by the range of EV/Revenue multiples its peer group trades at, subtract net debt and any minority interests or preferred stock ranking ahead of common shareholders, and divide by shares outstanding for a per-share range.
Why it fits this industry
When profits are thin, volatile, or still to come, revenue is the most dependable figure a company reports — this method values the business on the scale of what it actually sells.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. A pound of revenue is worth more at a high margin than a low one, so the peer group here is narrowed to companies earning a similar margin wherever enough of them exist. Where too few do, the bar falls back to the wider group and is the bluntest of the multiples — weigh it alongside the earnings-based bars.

EV / Revenue = (1.02/1.19/1.27)× revenue 1,943,100,000 ≈ 1,977,672,354.63/2,314,765,890.36/2,461,817,418.95 (enterprise_value); enterprise_value -> per share: equity (1,348,872,354.63/1,685,965,890.36/1,833,017,418.95) / 115,097,516 shares [EV bridge: minus net debt 628,800,000]

3 methods not shown