u/spyapple ·
Reddit — r/ValueInvesting
· August 02, 2026 at 09:43
· ⬆ 16 pts
· 💬 8 comments
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Summary
Author argues Clorox (CLX) is deeply undervalued at ~$95-96 despite market treating it like a declining business.
Thesis relies on 2026 10-Q fundamentals: 15.5x P/E, 12.8x EV/EBITDA, 4.7% dividend yield, and DCF showing intrinsic value well above current price.
Quality assessment: Well-researched DD using actual financials and valuation multiples, though DCF assumptions are optimistic and forward-looking.
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hey guys wanted to drop a fundamental breakdown on clorox because the market is treating this like a dying brick and mortar business when the actual 2026 financial statements say otherwise.
looking at the raw numbers from the recent 2026 10-q filings - clx stock is trading around 95 to 96 dollars a share right now with a market cap sitting right at 11.5 billion to 11.7 billion depending on the day. balance sheet has roughly 3.22 billion in total debt against 1.19 billion in cash and cash equivalents, which gives us an enterprise value ev of about 13.8 billion.
for the latest quarter ending march 2026, clorox pulled in 1.67 billion in revenue with gross profit of 722 million and operating income ebit of 283 million. net income came in at 187 million or 1.54 per share for the quarter, bringing trailing twelve month eps to around 6.17.
that puts the current p/e ratio at 15.5x. to put that into perspective clx historically traded at a 10 year average p/e of nearly 30x to 45x depending on the cycle. right now its ev/ebitda sits around 12.8x based on quarterly ebitda of 347 million, which is near a multi year low compared to its average multiple of 18x to 24x.
now if you run a basic discounted cash flow dcf model using real 2026 baseline data - assuming conservative terminal growth of 2.5%, a discount rate wacc around 7.5%, and annual free cash flow normalising back toward 850 million to 950 million as supply chain and restructuring costs settle - the intrinsic value lands way above where it trades today. if you couple cash flow growth with a re-rating back toward its historical 25x to 30x p/e multiple, you will perform at least 200% profit if invested now over a 4 to 5 year holding period as the target hits 280 plus per share.
theoretically the stock could drop further in the short term - macro uncertainty or consumer spending jitters could push it lower - but it would be temporary given their defensive moat, essential consumer brands, and solid 4.7% plus dividend yield paying you to wait. the risk to reward at a 15.5x p/e multiple for a staple giant like clorox makes zero sense to ignore.
CLX trades at 15.5x P/E and 12.8x EV/EBITDA vs historical averages of 30-45x and 18-24x respectively. Defensive staples with stable cash flow and a 4.7% dividend yield offer a favorable asymmetric risk/reward at current valuation. Re-rating toward historical multiples plus normalized FCF could generate ~200% upside over 4-5 years. Consumer spending weakness, further macro shocks, or prolonged supply chain/restructuring costs could push the stock lower short-term.