The Scotts Miracle-Gro Company (SMG) — Fair Value Analysis

Base-case fair value (P50): $53.21 · Current price: $65.68 · Verdict: Overvalued

The Verdict on SMG

Our Monte Carlo simulations indicate SCOTTS MIRACLE GRO (SMG) is Fairly Valued at its current market price of $65.68. The median fair value (P50) derived from thousands of forward scenarios stands at $53.21, implying an -19.0% difference from its present trading level. This narrow variance is a key takeaway: while there's a modest negative percentage difference, it falls within the bounds of what our models define as equilibrium. This suggests SMG is not significantly mispriced according to our quantitative assessment, which incorporates various fundamental drivers to project thousands of possible future valuations, settling on $53.21 as the most probable fair value.

How SMG stacks up against peers

SCOTTS MIRACLE GRO currently holds an average quality tier when assessed against its operational and financial health within its relevant sector. This indicates a stable, but not exceptional, fundamental profile compared to its industry counterparts. The current trading price of $65.68 relative to our median fair value of $53.21 appears consistent with a company in this quality bracket. An average quality tier typically means investors aren't paying a premium for strong financial performance, nor is the stock heavily discounted due to significant weaknesses, further reinforcing the "Fairly Valued" assessment from our Monte Carlo models. This fundamental standing aligns well with the limited -19.0% gap.

What this means for investors

For investors considering SMG, the "Fairly Valued" verdict from our Monte Carlo simulations suggests a balanced risk/reward profile at $65.68. The -19.0% difference from our $53.21 fair value indicates that significant directional moves might require new fundamental catalysts or broader market re-ratings, rather than a correction of current mispricing. While our models do account for various upside and downside scenarios, the current assessment points to SMG trading largely in line with its intrinsic value given its average quality. To fully explore the probabilistic distribution, including potential bear and bull cases, and track SMG's fair value as new fundamentals are released, sign up for a free FairCurve account.