Is Kaiser Aluminum Corporation (KALU) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $111.57, Kaiser Aluminum Corporation (KALU) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $60.39 and $349.09 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Kaiser Aluminum Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 10.8%, with a long-run terminal growth rate of 2.5%. About 72% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, KALU's modeled DCF value ranges from about $34.02 to $109.16 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Kaiser Aluminum Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of KALU's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind KALU's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $3,373,000,000 | Kaiser Aluminum FY2025 10-K (accession 0001193125-26-059575, filed 2026-02-19): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025 = $3,373.0M, +11.5% on FY2024's $3,024.0M. READ THIS BEFORE ANY GROWTH NUMBER: net sales here INCLUDE the aluminum Kaiser buys and passes straight through to customers. The FY2025 release splits it: $1,919.8M of 'Hedged Cost of Alloyed Metal' (aluminum at the Midwest Transaction Price = LME + Midwest Premium, plus alloys) and $1,453.2M of 'Conversion Revenue' — what Kaiser actually earns for rolling, extruding and finishing. FY2025's +11.5% was ALL metal: shipments FELL 5% (1,108.2M lbs vs 1,172.3M) and conversion revenue was flat ($1,453.2M vs $1,456.2M); hedged metal cost per lb rose 29%. CROSS-CHECK, H1 2026 (Q2 10-Q, accession 0001193125-26-314580): net sales $2,363.4M, +48% YoY, on shipments +6% and conversion revenue +14% — the rest is metal ($1.10/lb higher realized price, per the 10-Q). |
| Base EBIT margin | 5.6% | Kaiser Aluminum FY2025 10-K (accession 0001193125-26-059575, filed 2026-02-19): us-gaap:OperatingIncomeLoss FY2025 $188.8M / net sales $3,373.0M = 5.60%. Two things make this figure flattering and one makes it look worse than it is. FLATTERING: FY2025 adjusted EBITDA of $310M 'includes favorable metal price lag of approximately $93.0 million' (FY2025 release, 8-K Ex-99.1 filed 2026-02-18) — a timing gain from rising aluminum prices, not a repeatable earning; strip it and operating income is ~$96M (2.8% of net sales). LOOKS WORSE: the denominator is inflated by pass-through metal; on conversion revenue the same EBIT is 13.0%. CROSS-CHECK H1 2026: operating income $231.5M on $2,363.4M = 9.8%, but that half carried ~$64M of favorable metal lag plus what the 10-Q calls 'favorable metal consumption and valuation impacts' (manufacturing costs down $60.0M YoY). Q2 2026 alone printed 10.6% — the figure a live data feed reads as 'the margin'. |
| Forecast revenue growth | 36% → 2% → 4% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; the program-wide risk-free rate shared by every researched model in this run. |
| Beta | 1.58 | Yahoo Finance 5Y-monthly beta via yfinance: Published 5Y-monthly beta 1.58, used UNNORMALIZED. A levered (net debt ~0.4x market cap), small-cap ($2.6B), commodity-adjacent fabricator with aerospace exposure is a genuinely high-beta equity, so there is no stated reason to override it. It is the single biggest discount-rate lever: cost of equity is 13.14%. Each 0.1 of beta moves the per-share value by roughly $5-6 (see explainer). Normalizing toward 1.3 would raise the value; I don't, because nothing in the return history looks like a one-off distortion I can name. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Reasonable for a fabricator whose volumes track aerospace build rates, beverage-can demand and industrial activity, with metal held flat. Well below the 10.82% WACC. |
| Diluted shares | 17M | Kaiser Aluminum Q2 2026 10-Q (accession 0001193125-26-314580, filed 2026-07-23): Q2 2026 weighted-average diluted shares 16,918 thousand (two-class method; H1 16,886K; FY2025 16,622K). Above the 16,349,092 shares outstanding because unvested restricted stock, RSUs and performance shares participate. No buybacks — Kaiser 'suspended share repurchases as of March 2020' (FY2025 10-K) — so the count drifts up ~1-2%/yr with equity compensation. |
| Market price | $111.57 | Delayed quote · as of 2026-11-10 05:53 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Industrials stocks · All valued stocks · Interactive KALU valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.