• If you are wondering whether Clorox stock is starting to offer value again, the recent share price and valuation signals are giving you a fresh set of data points to weigh up.
• The stock last closed at US$96.82, with returns of 2.8% over the past week and 7.0% over the past month, while being down 4.0% year to date and 17.8% over the past year, as well as 30.9% and 33.6% over the past 3 and 5 years respectively.
• Recent news coverage has largely focused on Clorox's position in household products and how the company is responding to shifting consumer habits and competitive pressures. This context helps frame why the price has been moving in the short term, while longer term returns remain weaker.
• Clorox currently holds a value score of 5/6. This sets up a deeper look at how different valuation approaches assess the stock today and hints at an even more insightful way to think about value that will be covered at the end of this article.

Approach 1: Clorox Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth today by projecting the company’s future cash flows and discounting them back to a present value using a required rate of return.

For Clorox, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $370.8 million. Analyst estimates and further extrapolations suggest Free Cash Flow of around $693.6 million in 2026 and $851.9 million in 2027, reaching a projected $997.8 million in 2035. All of these projections are in $ and anything beyond the next few years is based on Simply Wall St extending analyst assumptions.

Adding up those discounted cash flows gives an estimated intrinsic value of about $170.66 per share. Compared with the recent share price of $96.82, this DCF output suggests the stock is trading at roughly a 43.3% discount.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Clorox is undervalued by 43.3%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks.

Approach 2: Clorox Price vs Earnings

For a profitable company, the P/E ratio is a useful way to see how much you are paying for each dollar of earnings, which is often the anchor for long term returns. A higher or lower P/E usually reflects what the market expects for future growth and how risky those earnings are, so a “normal” or “fair” P/E varies across companies and industries.

Clorox currently trades on a P/E of 15.49x. That sits below both the Household Products industry average P/E of 17.13x and the broader peer group average of 20.49x. On the surface, that points to the stock being priced more cautiously than many peers.

Simply Wall St’s Fair Ratio for Clorox is 16.30x. This is a proprietary estimate of what the P/E might be given factors such as the company’s earnings growth profile, profit margins, industry, market cap and specific risks. Because it adjusts for these company specific traits, it can be more useful than a simple comparison with industry or peer averages.

Comparing the Fair Ratio of 16.30x with the current P/E of 15.49x suggests the market price is below that fair level, which indicates the stock may be undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Clorox Narrative

Earlier it was mentioned that there is an even better way to understand valuation, and this is where Narratives come in. They let you attach a simple story about Clorox’s future revenue, earnings and margins to a forecast and a fair value, then compare that fair value with the current price using tools on Simply Wall St’s Community page that are used by millions of investors.

A Narrative is your view of what is happening with a company, translated into numbers. Instead of only looking at a single P/E or DCF output, you see how your expectations around things like Clorox’s digital transformation, product development, regulation and competition flow into a projected earnings path and an implied fair value. You can then judge whether the current share price looks high or low against that story.

Because Narratives on Simply Wall St update when new information such as news or earnings guidance arrives, you can see in real time how different viewpoints compare. For example, one Clorox Narrative might anchor on a cautious fair value of US$83.00 with margins at 9.7% in a few years, while another might point toward a higher fair value of about US$144.35 with margins at 12.6%, giving you a clear sense of how different expectations lead to very different conclusions about the same stock.

For Clorox, here are previews of two leading Clorox Narratives to make comparison easier:

Fair value in this bullish narrative: US$144.35 per share

Implied discount to fair value vs the last close of US$96.82: about 33.0%

Revenue growth assumption: 6.95%

• Explores a case in which ERP upgrades, digital projects and the GOJO acquisition support higher long term earnings power than the current share price reflects.
• Assumes revenue reaches about US$8.3b and earnings about US$1.0b by 2029, with profit margins rising to roughly 12.6% and the stock trading on a P/E of 19.4x.
• Draws on analyst work that sees the stock eventually priced closer to US$144.35, while flagging execution, competition and cost inflation as key risks to monitor.

Fair value in this bearish narrative: US$83.00 per share

Implied premium to fair value vs the last close of US$96.82: about 16.7%

Revenue growth assumption: 5.74%

• Presents Clorox as facing pressure from slower product refresh, private label competition and higher environmental and supply chain costs that could weigh on margins.
• Assumes revenue of about US$8.0b and earnings of US$778.6m by 2029, with margins easing to around 9.7% and the stock valued on a P/E of 15.3x.
• Highlights concerns around regulation, execution and leadership transition, and notes that the recent share price sits above the US$83.00 fair value used in this scenario.

To see how these bullish and bearish stories compare side by side, and to track how other investors update their assumptions as new information comes through, head over to the See what the community is saying about Clorox.

Do you think there's more to the story for Clorox? 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.