Formula One Group (FWON.K) is back in focus after Liberty Formula One Series C reported June quarter earnings of $0.02 per share on revenue of $934 million, both below Zacks Consensus Estimates and prior year levels.
See our latest analysis for Formula One Group.
The earnings miss has come while Formula One Group’s share price has been relatively resilient, with a 90 day share price return of 5.55% and a 1 year total shareholder return of 2.67%. This is set against a much stronger 3 year total shareholder return of 42.19%, which points to fading momentum compared with earlier years.
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Formula One Group still controls one of the strongest sports media assets around, yet the share price has barely moved over the past year. Is a premium business now quietly drifting toward a fairer price, or away from it?
Most Popular Narrative: 87% Overvalued
According to the most followed narrative on Formula One Group, the fair value sits at $53.37 compared with the last close of $99.69. That gap frames a very different story from the recent share price resilience.
And that is the core narrative: at the moment, Formula One is riding high and arguably the most popular it has ever been. But this popularity, the movies, the Netflix shows, are hiding real questions bubbling underneath the surface about what actually is Formula One, and the answers to that question can have a real impact on what Formula One looks like in the future, for better or worse.
Want to understand why this narrative pushes Formula One Group so far above its calculated fair value? It leans on ambitious long term revenue growth, higher margins and a premium future earnings multiple that is usually reserved for fast growing media platforms. Curious which assumptions matter most and how sensitive the valuation is to small changes in those inputs?
Result: Fair Value of $53.37 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Formula One Group could yet see this narrative challenged if fan sentiment stabilises around the new regulations or if driver criticism eases from current levels.
Find out about the key risks to this Formula One Group narrative.
Another View on Formula One Group’s Value
The community narrative puts Formula One Group far above its estimated $53.37 fair value, yet our DCF model points in a different direction. On that view, FWON.K at $99.69 sits about 4.4% below an estimated future cash flow value of $104.33, which suggests a tighter gap.
This raises a straightforward question for investors. Are the narrative assumptions too cautious about cash generation, or is the DCF model giving too much credit for Formula One Group’s future earnings power? Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Formula One Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
The debate around Formula One Group is clearly split between risks and rewards, so use this moment to review the underlying data and decide where you stand. To see both sides set out in one place, take a look at the 2 key rewards and 2 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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