UPBOUND GROUP, INC. (UPBD) DCF Valuation & Fundamental Primer
UPBOUND GROUP, INC. (UPBD) currently trades at — with an enterprise value of $952.4M. Our proprietary institutional model rates UPBOUND GROUP, INC. at 58/100 (Grade: B · Mixed Fundamental Profile).
Institutional fundamental teardown of Upbound Group, Inc. (UPBD) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
UPBOUND GROUP, INC. (UPBD) 3-Scenario DCF Valuation Range
Stress-test UPBD's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: —).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $133.38 N/M | $143.49 N/M | $155.28 N/M | $169.21 N/M | $185.93 N/M |
| 9.3% | $116.90 N/M | $124.86 N/M | $134.00 N/M | $144.60 N/M | $157.05 N/M |
| 10.0% | $103.34 N/M | $109.74 N/M | $116.99 N/M | $125.28 N/M | $134.85 N/M |
| 10.8% | $91.99 N/M | $97.22 N/M | $103.09 N/M | $109.72 N/M | $117.25 N/M |
| 11.5% | $82.36 N/M | $86.70 N/M | $91.52 N/M | $96.91 N/M | $102.97 N/M |
Institutional Software Quality Scorecard (58/100 · Grade B)
Viable recurring software business but carries notable dilution, lower margins, or higher leverage.
Positive FCF but lower conversion efficiency due to capex or timing
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 0.0% of revenue
Key Operational & Dilution Risks
- Lower software gross margins (48.1%), indicating higher hosting or service delivery drag
UPBOUND GROUP, INC. (UPBD) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $4.32B | $4.32B | $4.81B | $5.35B | $5.96B | $6.63B | $7.38B |
| Gross Profit | $2.08B | $2.08B | $2.32B | $2.58B | $2.87B | $3.19B | $3.55B |
| Operating Income (EBIT) | $291.6M | $291.6M | $324.6M | $361.3M | $402.2M | $447.7M | $498.3M |
| Stock-Based Compensation (SBC) | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Unlevered Free Cash Flow (FCF) | $48.4M | $48.4M | $53.9M | $60.0M | $66.7M | $74.3M | $82.7M |
| SBC-Adjusted True Cash Flow | $48.4M | $48.4M | $53.9M | $60.0M | $66.7M | $74.3M | $82.7M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -30.2 + 0.82 × (Rule of 40) · R² = 79%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| UPBOUND GROUP, INC. | UPBD | — | $4.32B | 48.1% | 1.1% | 12.4% | — | — |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 0.7× | $3.17B | $1.45B | $25.00 | 0.0% |
| -20% Multiple Compression | 0.6× | $2.54B | $813.0M | $14.04 | -20.0% |
| -35% Multiple Compression | 0.5× | $2.06B | $337.0M | $5.82 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $21.60B | $19.88B | $343.27 | +580.8% |
Frequently Asked Questions: UPBOUND GROUP, INC. (UPBD) Valuation
What is UPBOUND GROUP, INC. (UPBD)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, UPBOUND GROUP, INC. (UPBD) has a Base Case implied value of N/A per share (with a Bear Case of N/A and a Bull Case of N/A), compared to its current price of market price. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is UPBOUND GROUP, INC. (UPBD)'s Rule of 40 score and Free Cash Flow margin?
UPBOUND GROUP, INC. achieves a Rule of 40 score of 12.4%, combining a 11.3% revenue growth run-rate with a 1.1% TTM free cash flow margin on $4.32B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into UPBD stock according to Reverse-DCF analysis?
At market price per share (Enterprise Value of N/A), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 11.3%, compared to UPBOUND GROUP, INC.'s historical CAGR of 11.3%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does UPBOUND GROUP, INC. compare to Software & Cloud Services software peers?
UPBOUND GROUP, INC. (UPBD) earns an institutional Software Quality Score of 58/100 (Grade B — Mixed Fundamental Profile). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact UPBOUND GROUP, INC. (UPBD)'s valuation?
UPBOUND GROUP, INC. recorded $0 in TTM stock-based compensation (15.0% of revenue). When treating SBC as a cash-equivalent compensation expense, UPBOUND GROUP, INC.'s SBC-adjusted free cash flow yield is evaluated directly in our 3-statement model, scoring 25/25 on our Shareholder Dilution Friction pillar.