• If you are wondering whether SiteOne Landscape Supply at around US$127 per share looks expensive, cheap, or somewhere in between, this article focuses squarely on what the current price implies about its value.
• The stock has been volatile recently, with a 1.8% decline over the past week, a 16.4% decline over the past month, a 1.9% gain year to date, and a 4.5% return over the last year.
• Recent coverage has centered on how SiteOne sits within the broader Trade Distributors space and what that means for its long term role as a distributor of landscape supplies. This has prompted fresh interest in how its shares are priced today. This context helps explain why some investors are reassessing the balance between its moderate 1 year return and weaker 3 year and 5 year records of 2.3% and 28.3% declines.
• Simply Wall St currently gives SiteOne Landscape Supply a value score of 2 out of 6. Next up is a look at what traditional valuation tools like P/E and discounted cash flow can tell you about that score, and how a broader view of valuation, introduced at the end of this article, might change the way you think about the stock.

SiteOne Landscape Supply scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: SiteOne Landscape Supply Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model projects a company’s future cash flows and then discounts those projections back to today’s dollars to estimate what the business might be worth right now.

For SiteOne Landscape Supply, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $253.3 million. Analyst inputs extend out to 2028, with Simply Wall St extrapolating further. The ten year projection used in the model reaches about $390.0 million in 2035, all in $.

Pulling those projected cash flows back to today using a discount rate gives an estimated intrinsic value of around $131.96 per share. Compared with the recent share price of roughly $127, the DCF suggests the stock trades at about a 3.4% discount. This places it in the “about fair” zone rather than clearly cheap or expensive.

Result: ABOUT RIGHT

SiteOne Landscape Supply is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: SiteOne Landscape Supply Price vs Earnings (P/E)

For a profitable business, the P/E ratio is a useful shorthand for how much you are paying for each dollar of earnings. It ties the share price directly to current profits, which is usually the starting point for many investors.

What counts as a “normal” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk generally lines up with a lower P/E.

SiteOne Landscape Supply currently trades on a P/E of 37.33x. That sits above the Trade Distributors industry average P/E of 20.14x and also above the peer group average of 16.64x. Simply Wall St’s Fair Ratio for SiteOne, which is 28.32x, is designed to estimate a more tailored P/E by factoring in the company’s earnings growth profile, profit margins, industry, market cap and specific risks.

This Fair Ratio approach can be more informative than a simple peer or industry comparison because it adjusts for differences in business quality and risk between companies. With the current P/E of 37.33x versus the Fair Ratio of 28.32x, SiteOne shares appear to be trading above that tailored level.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.

Upgrade Your Decision Making: Choose your SiteOne Landscape Supply Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St give you a clear story for SiteOne Landscape Supply that connects your view of the business to a forecast and then to a fair value, and lets you compare that to today’s price. You can lean toward a more optimistic view with a fair value around US$200 or a more cautious view near US$134. Both outlooks, along with the consensus around US$156 and the highest and lowest analyst targets of US$185 and US$106, are available on the Community page. These update automatically when new news or earnings arrive, so you can always see how different investors are interpreting the same numbers.

Do you think there's more to the story for SiteOne Landscape Supply? 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.