Federated Hermes, Inc. (FHI) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+77.9%

$111.90

vs $62.92 price

Levered DCF

$100.21

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

5.53

Safe zone

Rating

A-

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	9.7×	12.73×	9.96×	13.7×	13.57×	8.89×	12.12×	11.7×
P/B	3.27×	2.98×	2.52×	2.98×	3.16×	2.45×	3.04×	3×
P/S	2.17×	2×	1.76×	2.15×	2.7×	1.92×	2.39×	2.27×
EV / EBITDA	7.06×	7.73×	6.82×	8.15×	8.9×	6.02×	8.36×	7.35×
Gross margin	67.9%	66.9%	65.0%	64.5%	59.1%	65.2%	66.7%	68.8%
Operating margin	28.5%	22.1%	24.1%	23.3%	28.2%	28.9%	26.2%	29.1%
Net margin	22.4%	16.4%	18.6%	16.6%	20.8%	22.5%	20.5%	19.4%
Current ratio	41.26×	2.7×	2.51×	2.53×	2.07×	2.17×	2×	1.68×
Debt / equity	0.38×	0.42×	0.41×	0.43×	0.31×	0.19×	0.21×	0.16×
Interest coverage	40.36×	0×	30.96×	30.42×	205.19×	0×	69.07×	56.12×
Dividend yield	2.7%	5.7%	3.5%	3.1%	3.0%	7.5%	3.4%	4.2%
Payout ratio	26.0%	68.9%	32.8%	40.9%	39.1%	63.7%	40.1%	48.5%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	33.7%	24.5%	26.5%	22.9%	24.3%	28.7%	26.2%	25.7%
Return on invested capital	17.0%	14.0%	15.7%	14.5%	15.0%	17.4%	15.9%	18.2%
Return on assets	17.6%	12.9%	14.2%	11.9%	13.4%	15.8%	14.5%	14.3%
Free cash flow yield	7.5%	10.5%	10.7%	10.3%	4.4%	12.9%	10.1%	7.3%
Earnings yield	10.3%	8.2%	10.5%	7.7%	7.7%	11.7%	8.6%	8.6%
Enterprise value	$3.8B	$3.2B	$2.9B	$3.2B	$3.6B	$2.7B	$3.1B	$2.6B
Net debt / EBITDA	-0.24×	-0.1×	0.17×	0.29×	0.28×	-0.2×	-0.07×	-0.06×
Cash conversion cycle (days)	21	-42	-29	-29	-17	-18	-29	-125