Is Mohawk Industries Attractively Priced After Housing Cycle Weakness in 2025?

• If you have been wondering whether Mohawk Industries at around $108 a share is a bargain or a value trap, you are not alone. This article is designed to cut through the noise and focus squarely on what the numbers say.
• The stock is down about 2.6% over the last week, roughly 1.2% over the last month, and about 6.3% year to date, while still sitting on a 10.8% gain over three years despite a 22.7% slide over five years.
• Recent headlines have centered on the housing and renovation cycle, ongoing cost inflation in materials, and how demand for flooring and surfaces is shifting between new builds and remodeling. These macro stories have weighed on sentiment, but they have also opened the door for investors who think the market is overreacting to short term noise.
• On our framework, Mohawk scores a solid 5/6 valuation check, which strongly suggests undervaluation. Next, we will walk through the key valuation approaches behind that score and hint at an even more robust way to think about fair value by the end of this piece.

Find out why Mohawk Industries's -9.2% return over the last year is lagging behind its peers.

Approach 1: Mohawk Industries Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting its future cash flows and then discounting those back into today’s dollars. For Mohawk Industries, the model uses a 2 Stage Free Cash Flow to Equity framework, starting from last twelve months free cash flow of about $513.6 Million and then layering in analyst forecasts and longer term extrapolations.

Analysts see free cash flow rising toward roughly $768.9 Million by 2026 and $791.5 Million by 2027, before moderating to around $722 Million by 2028 and then growing at low single digit rates through 2035 based on Simply Wall St estimates. All these projected cash flows are discounted back to the present to arrive at an estimated intrinsic value per share of about $165.64.

Versus a current share price near $108, the DCF indicates the stock trades at roughly a 34.4% discount to this estimated value. This suggests that the market may be pricing in a more pessimistic long term outlook than implied by the cash flow projections used in the model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Mohawk Industries is undervalued by 34.4%. Track this in your watchlist or portfolio, or discover 898 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mohawk Industries.

Approach 2: Mohawk Industries Price vs Earnings

For a profitable company like Mohawk, the Price to Earnings ratio is a useful shorthand for how much investors are willing to pay for each dollar of current earnings. In general, faster growing and lower risk businesses tend to have higher PE ratios, while companies with slower growth or higher uncertainty often trade on lower multiples.

Mohawk currently trades on a PE of about 15.9x, which is above the Consumer Durables industry average of roughly 10.7x but below the broader peer group average near 24.1x. To move beyond simple comparisons, Simply Wall St uses a Fair Ratio, which estimates what Mohawk’s PE might be given its earnings growth profile, margins, industry, size, and risk factors. For Mohawk, that Fair Ratio is 22.2x, indicating the market is assigning a noticeably lower multiple than these fundamentals suggest.

Because this Fair Ratio incorporates company specific drivers rather than just broad industry or peer averages, it can provide a more tailored gauge of value. Comparing 15.9x to the 22.2x Fair Ratio indicates that Mohawk’s shares are trading at a meaningful discount on an earnings basis.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1457 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Mohawk Industries Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company, expressed through the numbers you believe in, such as future revenue, earnings, margins, and an assumed fair value. A Narrative links three things together: the business story, the financial forecast it implies, and the fair value that drops out the other side. On Simply Wall St, Narratives are an easy, accessible tool on the Community page used by millions of investors to turn their views into concrete forecasts that can be compared against the current share price to decide whether Mohawk is a buy, a hold, or a sell. These Narratives update dynamically as new information like earnings, guidance, or news hits the market, so your thesis does not stay frozen in time. For example, one bullish Mohawk Narrative might lean toward the higher analyst target near $150, assuming stronger margin expansion and successful buybacks, while a more cautious Narrative might anchor closer to $120, baking in slower housing demand and more margin pressure.

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

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