Data sourced from SEC EDGAR filings and third-party price providers. Scores, valuations, and metrics are algorithmic estimates. This is not investment advice. See our Terms and Methodology.
/
Data sourced from SEC EDGAR filings and third-party price providers. Scores, valuations, and metrics are algorithmic estimates. This is not investment advice. See our Terms and Methodology.
Drax Group plc is a leading UK-based renewable energy company specializing in power generation, sustainable biomass pellet production, and carbon dioxide removal technologies. Its primary function is to generate renewable electricity, primarily through biomass at the Drax Power Station in North Yorkshire—the UK's largest single source of renewable power—and pumped hydro storage at Cruachan Power Station in Scotland. The company produces compressed wood pellets from sustainably sourced forest residues at manufacturing facilities across the United States and Canada, supplying its own operations and customers in Europe and Asia. Drax Group plc also engages in bioenergy with carbon capture and storage (BECCS), positioning it as a pioneer in 24/7 renewable power and negative emissions to combat climate change. With a portfolio including flexible generation assets like hydro and planned gas turbines, it supports grid stability and energy security amid the transition from fossil fuels. Listed on the London Stock Exchange and part of the FTSE 250 Index, Drax plays a pivotal role in the global push toward net zero by replacing coal with low-carbon alternatives and advancing decarbonization in hard-to-abate sectors.
£7.72
+£0.03 (+0.39%)
EOD Jul 3, 2026
11.72% operating margin is respectable but not wide. ROIC at 10.24%. Suggests the business covers its cost of capital, but doesn't point to a wide moat.
Revenue declined 12.5% YoY. Margins deteriorated 3.1pp alongside, both lines moving the wrong way.
At 38x earnings, the current multiple leaves limited room for execution misses or growth deceleration. ROIC dropped from 18.42% to 10.24%, capital efficiency is deteriorating.
38.2x earnings, 5.3x FCF. Not cheap, the quality is already reflected in the price. Upside from here requires either margin expansion or growth re-acceleration, not just continuation.
Based on TTM earnings · Diluted shares
Profitability & Returns
Revenue (TTM)
£5.39B
▼ -12.5% YoY
Net Income (TTM)
£68M
▼ -87.0% YoY
Op. Margin
11.72%
▼ -3.1pp YoY
ROIC
10.24%
▼ -8.2pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
£516M
▲ +9.3% YoY
Op. Cash Flow (TTM)
£789M
▼ -10.6% YoY
Net Debt
£776M
Cash & Equiv.
£302M
3Y CAGR: -11.5%
3Y CAGR: +150.0%
Continue Research
At a P/E of 38.2 and a price-to-free-cash-flow of 5.3, Drax Group (DRX.XLON) trades below a two-stage DCF intrinsic value of about £71.60 per share, so at £7.72 the stock looks undervalued (827.5% below estimated intrinsic value). A high multiple is not the same as overvalued: fast-growing, high-quality businesses can deserve a premium. See the general approach in how to tell if a stock is overvalued.
On quality, Drax Group scores 69/100 on Intrinsiqq's quality scorecard (a solid business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. It currently yields about 3.5%; see dividend safety for coverage and history. All figures are computed from SEC filings; read the full methodology. This is analysis, not investment advice.
Intrinsiqq's two-stage DCF estimates an intrinsic value of about £71.60 per share for DRX.XLON, projecting its recent free cash flow forward with a growth rate that fades toward a long-run rate and discounting it back to today. Applying a 25% margin of safety gives a more conservative fair-value entry around £53.70. At today's £7.72, that puts the stock about 827.5% below estimated intrinsic value. The result is sensitive to the growth and discount-rate inputs, so it is best to run conservative, base and optimistic cases. You can adjust all of them yourself with the sliders on the DCF tab.
Drax Group scores 69 out of 100 on Intrinsiqq's quality score, a weighted blend of 8 metrics each scored 0 to 100, which makes it a solid business on these measures. Recent fundamentals include a 11.7% operating margin and a 10.2% return on invested capital. The score weighs revenue and free-cash-flow growth, operating margins, return on invested capital, share-count change, and balance-sheet strength, all computed from SEC filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.
Yes, Drax Group pays a regular dividend of about £0.27 per share per year (typically in quarterly installments), a yield of roughly 3.5% at the current price. That is a payout ratio of about 140.3% of earnings, so the dividend is stretched at this level. Drax Group has grown the dividend at roughly 7.8% a year over the past few years. A low headline yield is not the same as a weak dividend: what matters is how well earnings and free cash flow cover the payout and whether it is growing, not the percentage alone. For DRX.XLON's full payout history, growth streak and dividend-safety score, see the dividends tab.
That depends on valuation and quality together, not either alone. DRX.XLON currently trades below its estimated intrinsic value and scores 69/100 on quality (solid). It also yields about 3.5%. A cheap price is only a bargain if the business is durable, and a premium can be justified by genuine quality, so the two questions, "is it cheap?" and "is it good?", only make sense side by side. Read the valuation against the quality scorecard, run the DCF on your own assumptions, and decide for yourself. This is analysis from SEC filings, not investment advice.