Headlam Group plc

LSE:HEAD Stock Report

Market Cap: UK£105.1m

Headlam Group Valuation

Is HEAD undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of HEAD when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HEAD (£1.32) is trading below our estimate of fair value (£1.78)

Significantly Below Fair Value: HEAD is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HEAD?

Key metric: As HEAD is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for HEAD. This is calculated by dividing HEAD's market cap by their current revenue.
What is HEAD's PS Ratio?
PS Ratio0.2x
SalesUK£617.20m
Market CapUK£105.12m

Price to Sales Ratio vs Peers

How does HEAD's PS Ratio compare to its peers?

The above table shows the PS ratio for HEAD vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average0.5x
ULTP Ultimate Products
0.7x6.9%UK£104.1m
SNWS Smiths News
0.1x-5.0%UK£146.7m
SUP Supreme
0.9x4.8%UK£190.1m
LIKE Likewise Group
0.3x7.5%UK£39.5m
HEAD Headlam Group
0.2x1.8%UK£105.1m

Price-To-Sales vs Peers: HEAD is good value based on its Price-To-Sales Ratio (0.2x) compared to the peer average (0.5x).

Price to Sales Ratio vs Industry

How does HEAD's PS Ratio compare vs other companies in the European Retail Distributors Industry?

1 CompanyPrice / SalesEstimated GrowthMarket Cap
HEAD 0.2xIndustry Avg. 0.3xNo. of Companies7PS00.40.81.21.62+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: HEAD is good value based on its Price-To-Sales Ratio (0.2x) compared to the European Retail Distributors industry average (0.3x).

Price to Sales Ratio vs Fair Ratio

What is HEAD's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HEAD PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.2x
Fair PS Ratio0.2x

Price-To-Sales vs Fair Ratio: HEAD is good value based on its Price-To-Sales Ratio (0.2x) compared to the estimated Fair Price-To-Sales Ratio (0.2x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst HEAD forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£1.32
UK£3.40
+158.6%
55.9%UK£5.30UK£1.50n/a2
Nov ’25UK£1.29
UK£3.40
+163.6%
55.9%UK£5.30UK£1.50n/a2
Oct ’25UK£1.36
UK£3.40
+150.0%
55.9%UK£5.30UK£1.50n/a2
Sep ’25UK£1.47
UK£3.40
+131.3%
55.9%UK£5.30UK£1.50n/a2
Aug ’25UK£1.49
UK£3.40
+128.2%
55.9%UK£5.30UK£1.50n/a2
Jul ’25UK£1.36
UK£3.40
+150.0%
55.9%UK£5.30UK£1.50n/a2
Jun ’25UK£1.57
UK£3.40
+116.6%
55.9%UK£5.30UK£1.50n/a2
May ’25UK£1.80
UK£3.78
+110.3%
40.4%UK£5.30UK£2.25n/a2
Apr ’25UK£1.76
UK£3.78
+114.5%
40.4%UK£5.30UK£2.25n/a2
Mar ’25UK£2.01
UK£3.90
+94.0%
35.9%UK£5.30UK£2.50n/a2
Feb ’25UK£2.06
UK£3.90
+89.3%
35.9%UK£5.30UK£2.50n/a2
Jan ’25UK£2.16
UK£3.90
+80.6%
35.9%UK£5.30UK£2.50n/a2
Dec ’24UK£1.93
UK£3.90
+102.6%
35.9%UK£5.30UK£2.50n/a2
Nov ’24UK£1.76
UK£3.90
+121.6%
35.9%UK£5.30UK£2.50UK£1.292
Oct ’24UK£2.25
UK£3.90
+73.3%
35.9%UK£5.30UK£2.50UK£1.362
Sep ’24UK£2.17
UK£3.90
+79.7%
35.9%UK£5.30UK£2.50UK£1.472
Aug ’24UK£2.23
UK£3.90
+74.9%
35.9%UK£5.30UK£2.50UK£1.492
Jul ’24UK£2.49
UK£4.40
+76.7%
20.5%UK£5.30UK£3.50UK£1.362
Jun ’24UK£2.48
UK£4.40
+77.4%
20.5%UK£5.30UK£3.50UK£1.572
May ’24UK£2.92
UK£4.65
+59.2%
14.0%UK£5.30UK£4.00UK£1.802
Apr ’24UK£3.04
UK£4.65
+53.0%
14.0%UK£5.30UK£4.00UK£1.762
Mar ’24UK£3.30
UK£4.65
+40.9%
14.0%UK£5.30UK£4.00UK£2.012
Feb ’24UK£3.37
UK£4.65
+38.0%
14.0%UK£5.30UK£4.00UK£2.062
Jan ’24UK£3.02
UK£4.65
+54.0%
14.0%UK£5.30UK£4.00UK£2.162
Dec ’23UK£3.09
UK£4.65
+50.5%
14.0%UK£5.30UK£4.00UK£1.932
Nov ’23UK£2.50
UK£5.03
+101.0%
5.5%UK£5.30UK£4.75UK£1.762

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.

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