Floor & Decor Holdings, Inc. (FND): what the price requires
At today's price, Floor & Decor Holdings, Inc. (FND) is priced for today's economics sustained for ~7.2 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FND
Headline
| Field | Value |
|---|---|
| Ticker | FND |
| Company | Floor & Decor Holdings, Inc. |
| Current price | $54.41/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 2.3% |
| Operating margin today | 5.7% |
| Margin compression implied | -3.4pp |
| Must persist for | 7.2y |
| Multiple paid | 29x operating income |
The operating-margin requirement is derived from the framework's value band at year 11, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 10% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +0.19σ |
| cohort percentile (of 210 peers) | 81 |
| sustained it ~7.2 years at this level | 21% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.93x | 5 | expensive |
| Earnings | 3.58x | 2 | expensive |
| Relative | 1.58x | 3 | expensive |
| Growth | 1.38x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.8%); the inversion above states its own rate.
Per-Model Detail (n=13)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $9.20 | 5.91x | yes | FCF base $0.1B, growth 3% (input: historical growth), terminal g 3.5%, WACC 6.7%, 5yr projection |
| DCF Exit Multiple | Growth | $45.00 | 1.21x | yes | Exit EV/EBITDA: 23.4x / 25.4x / 27.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $34.49 | 1.58x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.9x / 20.0x / 23.1x (bear / base = reference held flat / bull), EV/EBITDA 17.41x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $19.87 | 2.74x | yes | BV/sh $22.64, ROE (TTM) 8.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $18.60 | 2.93x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $39.53 | 1.38x | yes | Rev $4.7B, growth 3% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.3x / 1.5x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $12.28 | 4.43x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.31B × (1−23%) / WACC 6.7% → EPV (no growth) |
| Residual Income | Asset | $18.40 | 2.96x | yes | BV $22.64 + 5yr PV of (ROE (TTM) 8.1% − Kₑ 9.3%) × BV; BV grows 5.3%/yr |
| Graham Number | Asset | $30.62 | 1.78x | yes | √(22.5 × EPS $1.84 × BVPS $22.64) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $20.93 | 2.60x | yes | EBITDA $0.32B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $0.01 | 5440.50x | yes | FCF $105.5M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 5440.50x | yes | SBC-adj FCF $0.07B (FCF $0.11B − SBC $0.03B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $2.31 | 23.55x | yes | EPS $1.84 × (8.5 + 2×-3.5%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $2.92 | 18.63x | yes | BV $22.64 × (ROIC 0.9% / WACC 6.7%) |
| P/Sales Sector | Relative | $64.63 | 0.84x | yes | Revenue $4.68B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $19.89 | 2.74x | yes | EPS $1.84 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $196.1m |
| Net debt / NOPAT (after-tax) | 0.94x |
| Net debt / operating income (pre-tax) | 0.72x |
| Interest coverage | 62.2x |
| Share count CAGR (dilution) | 0.2% |
| Burning cash | no |
Bullet Takeaways
The counterintuitive thing about Floor & Decor is that the company is leaning in while its sales fall. Comparable store sales declined about 4% and earnings dropped about 18% in the latest quarter, yet management opened new warehouses, reaffirmed a 20-store-a-year expansion toward a 500-store goal, and authorized a $400 million buyback citing a valuation disconnect.
The price near $53.08 is a growth-stock multiple, about 29 times operating income, on a business in a cyclical trough. The inversion reads that as elevated: it implies the company holds a high growth rate near its self-funding ceiling for about seven years, a pace only about a fifth of comparable companies sustained that long.
The whole thesis hinges on housing. Floor & Decor's comps track existing-home turnover closely, and turnover is frozen by high mortgage rates. The bet is that a housing recovery and continued store growth reaccelerate the business; the risk is paying a recovery multiple before the recovery shows up.
Bull Case
The surprising part of the Floor & Decor story is the disconnect between the business cycle and the company's behavior. Sales are soft, comparable store sales fell about 3.7% in the first quarter of 2026 and earnings dropped about 18%, the kind of numbers that usually send a retailer into retrenchment. Instead, Floor & Decor is investing through the downturn: it opened six new warehouse stores to reach 276, plans about 20 new stores in fiscal 2026, and authorized a $400 million buyback specifically because management sees a valuation disconnect, with an explicit commitment not to take on debt to fund it. A company that opens stores and buys back its own shares during a trough is signaling conviction that the trough is temporary.
The long-term unit-growth runway is the heart of the bull case, and it is genuine. Floor & Decor operates 276 warehouse stores against a stated long-term target of 500 in the United States, so the store base can nearly double from here. The filing lays out the strategy plainly, to "drive growth in net sales and profitability" by opening "Warehouse-Format Stores in New and Existing Markets" with a disciplined real-estate process [FY2025 10-K, accession 0001628280-26-009770], and points to operating-margin improvement "through increased operating leverage" as the base scales [FY2025 10-K, accession 0001628280-26-009770]. Each new store is a future comp-and-profit contributor, and the model has worked for years.
The balance sheet and competitive position support patience. Net debt is modest at roughly one times operating profit, interest coverage is extremely high at over 80 times, and the company generates free cash flow even in a weak year. Its scale, broad assortment, and pricing power leave it better positioned on tariffs than smaller flooring competitors that are struggling with tighter economics, which sets up potential market-share gains as weaker rivals retreat. If housing turnover recovers even modestly, with some analysts expecting mortgage rates to ease and turnover to pick up in 2026, the combination of a comp rebound and a growing store base could reaccelerate earnings quickly, and Goldman's upgrade to neutral with a $71 target reflects that scenario.
Bear Case
The structural truth a Floor & Decor holder has to face is that the multiple is pricing a housing recovery that has not happened. At about $53.08 (June 27, 2026) the stock trades at roughly 29 times operating income, a growth multiple, while the actual business is shrinking on a same-store basis. Comparable store sales fell about 3.7% in the first quarter, driven by a 5.5% drop in transactions, and the full-year guide calls for comps flat to down 4%. The company is paying for store growth and a future recovery, not for current performance, and the filing is candid about the downside path, warning that "comparable store sales could continue to be negative" and that "if this trend continues, it is likely that overall net sales growth would be adversely affected" [FY2025 10-K, accession 0001628280-26-009770]. Buying a declining-comp retailer at a recovery multiple is a bet on timing, and timing the housing market is notoriously hard.
The dependence on housing turnover is the single variable with the most leverage, and it sits entirely outside the company's control. Floor & Decor's comparable sales are highly correlated to existing-home sales, because people redo floors when they buy or sell a house, and existing-home turnover is near multi-decade lows, frozen by mortgage rates that have locked homeowners into their current homes. If rates stay higher for longer, the comp pressure persists, and the store-growth story cannot fully offset a stagnant installed customer base; opening new stores into weak demand can even pressure returns on the new capital. The "dead money until housing turns" critique is the honest framing: the business is fine, but the catalyst is external and undated.
The valuation leaves no margin for a slow recovery. No valuation family reaches the current price: the asset-based methods land near $18 to $20 off a book value of $22.64 and a trailing return on equity of 8.1%, below the cost of equity, the earnings-power frame lands near $12, and even the forward-growth and relative methods sit below the price. The price is a bet beyond what any standard frame supports, justified only by a strong housing recovery plus flawless execution of the 500-store rollout. If the recovery is shallow or delayed, the multiple compresses toward the levels the conservative methods imply, which sit far below the current price. A trough-earnings retailer at a peak-style multiple is the configuration most exposed to a disappointment in the recovery's timing.
Valuation
Floor & Decor is valued as a whole company off its operating income, and the read is plainly elevated. At about $53.08 the price works out to roughly 29 times company-wide operating profit, which inverts to an assumption that the company holds growth near its self-funding ceiling for about seven years. That is a single solve under a 10.1% cost of capital with growth searched to a 25% ceiling, so it is approximate, but the framework reads it as elevated, with only about 21% of comparable fast-growers having sustained that pace for that long.
The X-ray is unusually one-sided: no valuation family reaches the price. The asset-based methods, simple and two-stage excess return, land near $18 to $20 off a book value of $22.64, because the trailing return on equity of 8.1% sits below the cost of equity. The earnings-power frame lands near $12 on normalized operating income. The relative method on a sector multiple lands near $34, and even the forward DCF-exit-multiple and discounted-future-market-cap frames land in the $38 to $44 range, all below the current price. The characterization is direct: the price is rich on assets, earnings power, peers, and even forward growth, a bet beyond what any standard frame supports.
The reconciliation is that the methods are pricing the trough, and the price is pricing the recovery. This is a quality retailer with a long store-growth runway and a strong balance sheet, so the premium is not irrational; the market is paying for a return to mid-single-digit comps and continued unit growth. The fiscal 2026 comp guidance of flat to down 4% says that recovery has not yet started.
Catalysts
The most recent catalyst was the first-quarter fiscal 2026 report, which showed continued cyclical pressure alongside a confident capital-allocation move. Net sales fell about 0.7% to $1,152.3 million, comparable store sales declined 3.7%, operating income dropped 18.4% to $52.4 million, and diluted earnings fell to $0.37. Management guided fiscal 2026 to net sales of roughly $4.77 billion to $4.99 billion, comparable store sales of flat to down 4%, and diluted earnings of about $1.83 to $2.08 including an extra 53rd week, and it authorized a $400 million share repurchase program citing a valuation disconnect.
The unit-growth program is the steady internal catalyst. Floor & Decor opened six warehouses in the quarter to reach 276 and plans about 20 new stores in fiscal 2026, with flexibility to accelerate if conditions improve, against a long-term target of 500 stores. Each opening is a future revenue and profit contributor, and the pace of new-store productivity is a metric to watch.
The dominant external catalyst is housing. Because comparable sales track existing-home turnover, the path of mortgage rates and home sales is the swing factor for the whole thesis. Some analysts, including Goldman in upgrading the stock to neutral with a $71 target, expect a modestly better housing backdrop in 2026 with mortgage rates easing and turnover rising, which would support a comp rebound. The bearish risk is that rates stay elevated and the freeze in housing turnover persists. Tariffs are a secondary factor where the company's scale is an advantage over smaller rivals. The watch items are monthly housing-turnover data, the comp trajectory through the year, and new-store productivity.
Sources: Floor & Decor Q1 2026 results, FND IR; Floor & Decor Q1 2026 8-K and $400M buyback, StockTitan; Floor & Decor Q1 2026 sales and profit decline, StockTitan; Is Floor & Decor positioning for a 2026 housing upswing, Benzinga; Floor & Decor balances growth with softer demand, TipRanks.
Peer Cohorts (Per Segment, With Filing Citations)
Retail (single reportable segment) (reported)
- BLDR (Builders FirstSource, Inc.)
- (no filing in the citation store)
- TSCO (TRACTOR SUPPLY CO /DE/)
- (no filing in the citation store)
- FAST (FASTENAL CO)
- (no filing in the citation store)
- SHW (THE SHERWIN-WILLIAMS COMPANY)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.