Citigroup Inc. (C) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Financial Services · Banks - Diversified
Is Citigroup Inc. a safe investment right now?
Citigroup Inc. is in the Financial Services sector — Altman Z-Score does not apply to this type of company. Our valuation model estimates fair value at $565.66, suggesting the stock may be undervalued by 76%.
Why the Altman Z-Score does not apply to Citigroup Inc.
The Altman Z-Score is designed for manufacturing and non-financial companies. It uses ratios like Working Capital / Total Assets and Revenue / Total Assets that produce misleading results for Financial Services companies.
- Banks hold massive assets (loans) that inflate Total Assets, making WC/TA nearly zero — a false distress signal
- Utilities carry high regulated debt by design — the model misreads leverage as risk
- REITs use Funds From Operations (FFO), not Free Cash Flow — standard cash flow analysis doesn't apply
Altman Z-Score is designed for manufacturing companies and does not apply to banks, utilities, or REITs.
Note: A sector-specific financial health model for Financial Services companies is planned for a future update.
What is Citigroup Inc. actually worth?
Fair value range: $100.06 — $1,216.87
Valuation Methods
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $100.06 | 50% | 10.2x avg PE (4 years) × $9.81 forward EPS |
| DCF (Discounted Cash Flow) | $1,216.87 | 30% | Two-stage DCF: $31.9B TTM FCF, 13.3% growth, 7.0% WACC |
| EV/FCF Multiple | $752.84 | 20% | TTM FCF × 22x multiple + net cash |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 13.3% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | 42.8% | Consensus (21 analysts) |
| Analyst EPS Growth (Next Year) | 15.2% | Consensus |
| Historical 5Y FCF CAGR | -23.5% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 7.0% | CAPM (Rf=4.3% + 1.08*5.5%) |
| Net Cash / (Debt) | $583,082M | Balance sheet |
| Base FCF (TTM) | $31.9B | Historical avg |
| Shares Outstanding | 1,705,600,000 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 7.0% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $300.72 | $222.23 | $366.02 | $160.35 |
| 2.5% | $348.14 | $255.30 | $425.51 | $182.36 |
| 5.0% | $402.55 | $293.10 | $493.90 | $207.37 |
| 7.5% | $476.78 | $343.83 | $588.01 | $240.18 |
Free Cash Flow History
| Year | FCF | Growth |
|---|---|---|
| 2020 | $33.2B | — |
| 2021 | $−18.2B | N/A |
| 2022 | $−26.9B | N/A |
| 2023 | $43.0B | N/A |
| 2024 | $19.4B | +-54.8% |
| 2025 | $−80.0B | N/A |
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Why standard moat analysis does not apply to Citigroup Inc.
Our standard moat model uses ROIC stability, gross margin trends, and switching costs — metrics designed for product and service companies. Financial Services companies compete on fundamentally different dimensions.
- Banks — moat comes from deposit cost advantage, net interest margin stability, and fee income diversification
- Utilities — moat is a regulatory monopoly with guaranteed rate of return on invested capital
- REITs — moat comes from property portfolio quality, location, tenant mix, and cap rate advantages
Standard moat analysis (ROIC/gross margin/switching costs) does not reliably apply to Financial Services companies. Banks compete on net interest margin, utilities on regulated returns, and REITs on occupancy and cap rates.
Note: A sector-specific competitive analysis for Financial Services companies is planned for a future update.
Is Citigroup Inc.'s dividend safe?
Can Citigroup Inc. afford its dividend?
Payout ratio is 29.2%. FCF covers the dividend 232.0x. 39 consecutive years of payments.
Citigroup Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $78.1B | $75.3B | $75.5B | Stable |
| Net Income | $9.2B | $14.8B | $11.0B | Declining |
| Free Cash Flow | −$80.0B | $19.4B | −$26.9B | Declining |
Common questions about Citigroup Inc.
Why doesn't Citigroup Inc. have an Altman Z-Score?
The Altman Z-Score was designed for manufacturing companies and uses ratios like Working Capital/Total Assets and Revenue/Total Assets. These ratios produce misleading results for banks, utilities, and REITs, whose balance sheets are structured fundamentally differently. We exclude Z-Score for these sectors to avoid presenting inaccurate data.
What is Citigroup Inc.'s estimated fair value?
Our valuation model estimates Citigroup Inc.'s fair value at $565.66 per share. The current margin of safety is 76.5%. This estimate uses a PE-based approach with analyst consensus earnings.
Why doesn't Citigroup Inc. have a moat rating?
Our standard moat analysis uses ROIC, gross margins, and switching costs — metrics designed for product/service companies. Banks compete on net interest margins and deposit costs, utilities have regulated monopoly moats, and REITs compete on property location and occupancy rates. These require sector-specific models that we plan to add in the future.
Is Citigroup Inc.'s dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
C analysis methodology: How we calculate fair value, Z-Scores, and moat ratings