MeritValue

Sally Beauty Holdings, Inc.

SBHdata completeness 100%18 fiscal years on file
The thesis, from the filings

Sally Beauty Holdings, Inc. earns about 18% on invested capital, far above its ~9% cost of capital, and has bought back 9% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $13.19 and $18.43 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.87B1$3.82B2$3.73B3$3.72B3$3.7B3
Net income$239.9M4$183.6M5$184.6M6$153.4M6$195.9M6
Operating cash flow$381.9M7$156.5M8$249.3M9$246.5M9$274.8M9
Capital expenditure$73.9M10$99.3M11$90.7M12$101.2M12$102.1M12
Free cash flow (derived)$308M7$57.3M8$158.6M9$145.4M9$172.7M9
Total debt$1.39B13$1.09B14$1.08B15$994M16$875M16
Cash & equivalents$401M17$70.6M18$123M19$108M20$149.2M20
Diluted shares114.2M110.3M109.3M106.9M103.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$76.5
your share of equity
Profit it earned you last year
$18.87
Free cash flow it threw off
$16.63
Debt you’d be carrying
$84.28

10 shares is a claim on $76.5 of net worth that earned you $18.87 and generated $16.63 of cash last year, against $84.28 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 24%FY22 19%FY23 16%FY24 14%FY25 16%

It earned about 18% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−9% shares · 5y

Share count is down 9% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 37% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $13.19 and $18.43 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$13.19
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$158.6M
DCF · Growth Exit 5Y
$14.83
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$158.6M
Earnings Power Value
$18.43
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$184.6M
  • growthAssumed0.0%
Graham Number
$18.04
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $14.83
The three cases
Bear0.0%$14.83
Base0.0%$14.83
Bull5.0%$20.11

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-09-30 · accession 0000950170-23-064558 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-09-30 · accession 0000950170-24-127217 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-09-30 · accession 0001193125-25-280122 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-09-30 · accession 0000950170-23-064558 (NetIncomeLoss)
  5. 10-K · period ending 2022-09-30 · accession 0000950170-24-127217 (NetIncomeLoss)
  6. 10-K · period ending 2023-09-30 · accession 0001193125-25-280122 (NetIncomeLoss)
  7. 10-K · period ending 2021-09-30 · accession 0000950170-23-064558 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-09-30 · accession 0000950170-24-127217 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-09-30 · accession 0001193125-25-280122 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-09-30 · accession 0000950170-23-064558 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-09-30 · accession 0000950170-24-127217 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-09-30 · accession 0001193125-25-280122 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-09-30 · accession 0001564590-22-037949 (LongTermDebt)
  14. 10-K · period ending 2022-09-30 · accession 0000950170-23-064558 (LongTermDebt)
  15. 10-K · period ending 2023-09-30 · accession 0000950170-24-127217 (LongTermDebt)
  16. 10-K · period ending 2024-09-30 · accession 0001193125-25-280122 (LongTermDebt)
  17. 10-K · period ending 2021-09-30 · accession 0001564590-22-037949 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-09-30 · accession 0000950170-23-064558 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-09-30 · accession 0000950170-24-127217 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-09-30 · accession 0001193125-25-280122 (CashAndCashEquivalentsAtCarryingValue)