PEP Fair Value Estimate
$106.6531.4% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
PepsiCo Inc
Exchange: NASDAQSector: Consumer DefensiveIndustry: Beverages - Non-Alcoholic
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated nearly $94 billion in net revenue in 2025, driven by a complementary beverage and convenient foods portfolio that includes Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. PepsiCo's product portfolio includes a wide range of enjoyable foods and drinks, including many iconic brands that generate more than $1 billion each in estimated annual retail sales. Guiding PepsiCo is our vision to Be the Global Leader in Beverages and Convenient Foods by Winning with pep+ (PepsiCo Positive). pep+ is our strategic end-to-end transformation that places sustainability at the center of our business strategy, seeking to drive growth and build a stronger, more resilient future for PepsiCo and the communities where we operate.
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Net income compounded at 2.0% annually over 6 years.
Current Price
$155.44
-0.17%GoodMoat Value
$106.65
31.4% overvaluedProfile
Valuation (TTM)
Market Cap$212.43B
P/E24.33
EV$245.96B
P/B10.41
Shares Out1.37B
P/Sales2.23
Revenue$95.45B
EV/EBITDA15.67
PepsiCo Inc (PEP) Valuation
GoodMoat Analysis
PepsiCo's current price of $151.36 is significantly above the GoodMoat Target of $106.65, indicating a negative margin of safety and an unfavourable valuation from a value investing perspective. While the company possesses strong quality indicators, its P/E multiple is elevated relative to its modest growth rate.
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The primary valuation assessment reveals a significant disconnect between the market price and the estimated intrinsic value. The GoodMoat Target of $106.65 suggests the stock is currently trading at a 42% premium. According to the framework's DCF bands, this represents a negative margin of safety, placing it firmly in the 'Unfavourable' category (<10% MoS). The forward P/E of 25.2x must be contextualized against the company's 5.6% revenue growth. This results in a high PEG ratio, indicating the market is pricing in expectations that may be difficult for the current growth trajectory to justify. While PepsiCo is a high-quality business with a strong moat and a 40.4% ROE, the valuation appears to price in perfection. For a value investor seeking a margin of safety, the current price does not offer an attractive entry point. The analysis suggests waiting for a more favourable valuation that better aligns with the company's fundamental growth profile. Analysis based on data as of 2024-05-15.
PEP Valuation Metrics
FCF$8.20B
FCF Growth Rate6.60%
EPS Growth (CAGR)2.01%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →PEP Valuation & Fair Value Analysis
PepsiCo Inc (PEP) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for PepsiCo Inc is $106.65. The current stock price is $155.44, suggesting the stock is 45.8% overvalued.
The price-to-earnings (P/E) ratio is 24.33. Price-to-book ratio is 10.41. Price-to-sales ratio is 2.23. Enterprise value to EBITDA is 15.67. PEG ratio is 0.91.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of PepsiCo Inc's intrinsic value.