Wealthfront Corporation (WLTH) DCF Valuation & Fundamental Primer
Wealthfront Corporation (WLTH) currently trades at $9.19 with an enterprise value of $7.54B. Our proprietary institutional model rates Wealthfront Corporation at 94/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of -5.1% vs. historical growth of 42.5% (Substantial Margin of Safety).
Institutional fundamental teardown of Wealthfront Corporation (WLTH) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Wealthfront Corporation (WLTH) 3-Scenario DCF Valuation Range
Stress-test WLTH'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: $9.19).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $58.66 +538% | $62.57 +581% | $67.13 +630% | $72.51 +689% | $78.97 +759% |
| 9.3% | $52.37 +470% | $55.45 +503% | $58.98 +542% | $63.08 +586% | $67.89 +639% |
| 10.0% | $47.20 +414% | $49.68 +441% | $52.48 +471% | $55.69 +506% | $59.38 +546% |
| 10.8% | $42.89 +367% | $44.92 +389% | $47.18 +413% | $49.74 +441% | $52.66 +473% |
| 11.5% | $39.24 +327% | $40.92 +345% | $42.78 +366% | $44.87 +388% | $47.21 +414% |
Institutional Software Quality Scorecard (94/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Strong cash conversion; 100%+ of operating profit turns into free cash
Minimal dilution friction; management compensation aligned with shareholders
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High cash conversion: 100%+ of operating income converted to free cash flow
- Low dilution friction: SBC is only 0.0% of revenue
- Top-quartile software unit economics: 90.0% gross margin and 82.2% Rule of 40 score
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into WLTH?
The current share price only requires -5.1% 5-year CAGR (-5.1% dilution-adjusted), well below historical growth of 42.5%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (0.0% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires -5.1% 5-year revenue CAGR to justify $9.19/sh on a true per-share economic cash flow basis.
Wealthfront Corporation (WLTH) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $308.9M | $308.9M | $440.2M | $627.4M | $894.1M | $1.27B | $1.82B |
| Gross Profit | $277.9M | $277.9M | $396.0M | $564.4M | $804.4M | $1.15B | $1.63B |
| Operating Income (EBIT) | $121.5M | $121.5M | $173.1M | $246.7M | $351.7M | $501.2M | $714.3M |
| Stock-Based Compensation (SBC) | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Unlevered Free Cash Flow (FCF) | $122.6M | $122.6M | $174.8M | $249.1M | $355.0M | $505.9M | $721.0M |
| SBC-Adjusted True Cash Flow | $122.6M | $122.6M | $174.8M | $249.1M | $355.0M | $505.9M | $721.0M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 7.9 + 0.05 × (Rule of 40) · R² = 12%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 |
|---|---|---|---|---|---|---|---|---|
| Wealthfront Corporation | WLTH | $1.34B | $308.9M | 90.0% | 39.7% | 82.2% | — | 3.9× |
| 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 | 3.9× | $1.21B | $1.34B | $9.19 | 0.0% |
| -20% Multiple Compression | 3.1× | $964.5M | $1.10B | $7.54 | -20.0% |
| -35% Multiple Compression | 2.5× | $783.7M | $922.2M | $6.31 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $1.54B | $1.68B | $11.51 | +28.1% |
Frequently Asked Questions: Wealthfront Corporation (WLTH) Valuation
What is Wealthfront Corporation (WLTH)'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, Wealthfront Corporation (WLTH) has a Base Case implied value of $52.52 per share (with a Bear Case of $16.31 and a Bull Case of $116.17), compared to its current price of $9.19. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Wealthfront Corporation (WLTH)'s Rule of 40 score and Free Cash Flow margin?
Wealthfront Corporation achieves a Rule of 40 score of 82.2%, combining a 42.5% revenue growth run-rate with a 39.7% TTM free cash flow margin on $308.9M 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 WLTH stock according to Reverse-DCF analysis?
At $9.19 per share (Enterprise Value of $1.21B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -5.1%, compared to Wealthfront Corporation's historical CAGR of 42.5%. Overall market expectations are rated as "Substantial Margin of Safety".
How does Wealthfront Corporation compare to Software & Cloud Services software peers?
Wealthfront Corporation (WLTH) earns an institutional Software Quality Score of 94/100 (Grade A+ — Elite SaaS Compounder). 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 Wealthfront Corporation (WLTH)'s valuation?
Wealthfront Corporation recorded $0 in TTM stock-based compensation (15.0% of revenue). When treating SBC as a cash-equivalent compensation expense, Wealthfront Corporation's SBC-adjusted free cash flow yield is 9.1%, scoring 25/25 on our Shareholder Dilution Friction pillar.