Restaurants · NYSE
Current Price
$159.85
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Yum! Brands, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates through four segments: the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division. The company operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. As of December 31, 2021, it had 26,934 KFC units; 18,381 Pizza Hut units; 7,791 Taco Bell units; and 318 The Habit Burger Grill units in approximately 157 countries and territories. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.
ROIC (TTM)
31.9%
ROE (TTM)
-22.9%
FCF Yield
3.71%
Based on trailing twelve-month data, YUM shows a free cash flow per share of N/A and a ROIC of 31.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.71% are important context metrics when evaluating YUM's stock valuation relative to peers.
The intrinsic value of YUM depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether YUM is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $159.85. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Yum! Brands, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Restaurants industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting YUM's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Yum! Brands, Inc., this means projecting how much free cash flow the Restaurants will produce over the next 5-10 years, then discounting those amounts to today's dollars. YUM's ROIC of 31.9% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For YUM, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
