Paramount Global (PARA) Stock Valuation — DCF Analysis
Entertainment · NASDAQ
Current Price
$11.04
Intrinsic Value
$6.18
-78.8% margin of safety
COMPETITIVE MOAT
↑Content Library Strength
Paramount possesses a vast and diverse library of iconic intellectual property across film and television. This deep catalog provides a consistent source for new content and evergreen appeal.
↑Brand Recognition
Strong brands like CBS, Paramount Pictures, and Nickelodeon resonate deeply with global audiences. This established recognition drives viewership and consumer loyalty across various platforms.
↑Synergistic Potential
The potential merger with Warner Bros. Discovery could create significant synergies. Combining content, distribution, and advertising capabilities could lead to greater market power and efficiency.
INVESTMENT RISKS
↓Regulatory Scrutiny
The proposed merger with Warner Bros. Discovery faces intense DOJ scrutiny. Concerns about market concentration and competition in streaming could lead to deal blockage or significant concessions.
↓Debt Burden
The company's history, exemplified by Ted Turner's ventures, highlights the risks of building on debt. Significant debt financing for acquisitions could strain financial flexibility and profitability.
↓Fragmented Streaming Market
The media earnings blitz reveals a challenging streaming landscape. Intense competition and subscriber fatigue make it difficult to achieve sustainable profitability and market share.
Base case
PARA base case valuation
A base case discounted cash flow model for PARA estimates an intrinsic value of about $6.18 per share, against a current price of $11.04. The model assumes -1.1% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$6.18
Margin of safety
-78.8%
Expected annual return
-11.0%
Base case assumptions: -1.1% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2025-08-07.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PARA valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Paramount Global respond.
Open DCF Calculator for PARACompany Overview
Paramount Global is a prominent global media and entertainment company with extensive operations. It is a major producer and distributor of content, curating diverse programming for the CBS Television Network. This includes everything from popular primetime comedies and dramas, reality series, and special events, to children's shows, daytime and late-night programs, and game shows. Furthermore, it supplies a wide array of news, public affairs, sports, and general entertainment broadcasts, alongside syndicated talk shows, court shows, and newsmagazines. Its reach extends to the ownership and management of 29 local broadcast television stations. The company also operates CBS Sports Network, a dedicated 24-hour cable channel for sports enthusiasts, and offers various streaming and cable subscription services. A cornerstone of its digital offerings is Paramount+, its flagship subscription video-on-demand (SVOD) and live streaming platform. Paramount Global develops and acquires programming tailored for diverse media outlets, spanning subscription cable networks, streaming platforms, and both premium and basic cable channels. Beyond its television and streaming endeavors, the company is also deeply involved in the motion picture industry, developing, producing, financing, acquiring, and distributing feature films. Founded in 1986 and headquartered in New York City, the entity now known as Paramount Global officially adopted its current name in February 2022, having previously operated as ViacomCBS Inc. It functions as a subsidiary under National Amusements, Inc.
Financial Metrics — PARA Stock Valuation Data
Revenue/Share (TTM)
$44.23
FCF/Share (TTM)
$0.45
ROIC (TTM)
-0.4%
ROE (TTM)
-4.6%
P/FCF
38.5x
EV/EBITDA
-5.8x
FCF Yield
2.60%
Debt/Equity
1.36x
Based on trailing twelve-month data, PARA shows a free cash flow per share of $0.45 and a ROIC of -0.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 38.5x and FCF yield of 2.60% are important context metrics when evaluating PARA's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of PARA?
Paramount Global currently generates $0.45 in free cash flow per share. At the current price of $11.04, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is PARA undervalued?
PARA trades at a P/FCF ratio of 38.5x with a free cash flow yield of 2.60%. This P/FCF is in a moderate range. However, whether PARA is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value PARA stock using DCF?
To perform a DCF valuation on Paramount Global: (1) Start with the trailing free cash flow per share ($0.45) as the base, (2) project future FCF growth over 5-10 years based on Entertainment industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PARA's risk profile — with a debt-to-equity of 1.36x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to PARA?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Paramount Global, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Entertainment trends, then discounting those amounts to today's dollars. PARA's ROIC of -0.4% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect PARA stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PARA, with a debt-to-equity ratio of 1.36x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of -5.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See PARA PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Communication Services valuationsDCF and P/E value PARA with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2025-08-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.