Does WillScot’s Recent Rebound Signal a Cheaper Entry Point in 2025?
- Wondering if WillScot Holdings is quietly turning into a value story after a rough stretch? This breakdown will help you figure out whether the current share price really reflects its long term potential.
- The stock has inched up about 1.9% over the last week and 10.0% over the past month, even though it is still down roughly 41.4% year to date and 41.6% over the last year. This hints that sentiment might be starting to shift.
- Recent coverage has focused on how WillScot is repositioning itself within the modular space and consolidating prior acquisitions to drive better returns, while also tightening up its cost base as demand patterns evolve. Together, these moves have helped frame the latest price action as more than just a short term bounce. However, they also raise questions about what the business is really worth now.
- On our valuation checks, WillScot scores a solid 5 out of 6. Next we will walk through the main valuation approaches behind that number, before finishing with a more intuitive way to think about what fair value really means for this stock.
Find out why WillScot Holdings's -41.6% return over the last year is lagging behind its peers.
Approach 1: WillScot Holdings Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model estimates what a business is worth today by projecting its future cash flows and then discounting those cash flows back to their value in today’s dollars.
For WillScot Holdings, the model starts with last twelve month free cash flow of about $546 million and projects how that figure could evolve over time. Analyst estimates extend a few years ahead, with free cash flow expected to be around $481 million by 2027. Simply Wall St then extrapolates out to 2035, with projected free cash flows gradually trending in the mid $400 million to just above $500 million range as the business matures.
Using a 2 Stage Free Cash Flow to Equity approach and discounting all those future $ cash flows back to today results in an estimated intrinsic value of roughly $26.52 per share. Compared with the current market price, this suggests the stock is about 26.3% undervalued on a pure cash flow basis.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests WillScot Holdings is undervalued by 26.3%. Track this in your watchlist or portfolio, or discover 904 more undervalued stocks based on cash flows.
Approach 2: WillScot Holdings Price vs Earnings
For a consistently profitable business like WillScot Holdings, the price to earnings (PE) ratio is a practical way to gauge whether investors are paying a reasonable price for each dollar of earnings. In general, faster growth and lower risk can justify a higher PE, while slower growth and higher risk can point to a lower, more conservative multiple.
WillScot currently trades on a PE of about 15.9x, which is roughly half the Construction industry average of around 30.2x and also well below the broader peer group average of about 31.6x. Simply Wall St supplements these simple comparisons with its proprietary Fair Ratio, which estimates what a more tailored PE could be after accounting for the company’s earnings growth outlook, profitability, size, industry dynamics and risk profile. This makes the Fair Ratio more robust than a straight peer or sector comparison that treats all companies as if they were identical.
For WillScot, the Fair Ratio is 18.8x, moderately above the current 15.9x market multiple, indicating that the shares currently trade at a discount to what might be expected given its fundamentals.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your WillScot Holdings Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on Simply Wall St’s Community page that lets you write the story behind your numbers. You can link your view of a company’s future revenue, earnings and margins to a financial forecast, a fair value estimate and ultimately a buy or sell decision, as that fair value is compared with today’s price and then updated dynamically when new information like earnings or news arrives. This is why one WillScot Holdings Narrative on the platform might assume that infrastructure and ESG driven demand, digital pricing tools and higher value added services support a bullish $40 fair value. A more cautious Narrative might instead focus on weak local demand, high capital needs and project concentration risk to justify a more conservative $29 fair value, even though both investors are using the same data and tools to reach their own clear, actionable conclusion.
Do you think there's more to the story for WillScot Holdings? Head over to our Community to see what others are saying!
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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