Serco Group (SRP) fair value: what the stock is really worth
As of Nov 6, 2026: fair value (intrinsic value) of Serco Group stock £3.21, price £2.81, upside +14.3%, quality 71 out of 100. Rating: undervalued. Calculated from audited financials with 24 of our 26 valuation models and 37 quality factors, updated daily.
69 individual criteria per stock, every one traceableSee the method →
Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 9, 2026.
How to read this chart
60‑month range £1.10 – £3.20 · fair‑value band £2.38 – £4.39 · the £2.81 price screens below the £3.21 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). As of Nov 9, 2026.
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Serco Group plc provides public services in the United Kingdom, Europe, North America, the Asia Pacific, and the Middle East. It offers service design and advisory, resourcing, programme management, systems integration, case management, engineering, and assets and facilities management services.
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The company also provides administrative and back office, asylum seeker accommodation or passenger transport services; and supports in the decarbonization journeys of customers.
It serves the United Kingdom and Canadian governments, devolved authorities, and other public sector customers; and federal and civilian agencies, and various state and municipal governments in citizen services, defense, health and other facilities management, justice and immigration, and transport sectors.
Serco Group plc was founded in 1929 and is based in Hook, the United Kingdom.
Stock analysis
Serco Group (SRP) currently trades at £2.81, while our model-based Fair Value estimate is £3.21, implying the stock looks roughly 13% undervalued today.
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Valuation
Bull case: the Growth DCF group reads highest at a median of £7.20 per share, and 16 of the 24 models we run sit above the £2.81 price.
Bear case: the Dividend Discount group reads lowest at £0.7850, and 8 of the 24 models stay below the price. Data coverage for this calculation is high.
Scenario range: £2.38 (bear) to £4.39 (bull), the price of £2.81 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 71/100 (solid quality), in the Industrials sector.
Healthy Growth: Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Serco Group reported revenue of £5.0B in FY2025 versus £4.4B in FY2021, a compound +2.9%/yr. Reported net income was £146M in FY2025, compounding −16.8%/yr from FY2021.
Key figures
Market cap £2.8B Mid · P/E ratio 18.7 · P/S ratio 0.57 · EPS (TTM) £0.1500 · Dividend yield 1.7% · Net margin 3.1% · Return on equity 17.6% · Return on assets (EBIT) 8.0% (5-year average).
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 46 out of 100 (low confidence).
What moves the price
The share trades about 12% below its 52-week high and 29% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Industrials peers we cover trades at −12% fair-value upside, at 14%, SRP screens cheaper than that median.
Fair Value models
Bear£2.38Fair Value £3.21Bull£4.39
Price £2.81 · Upside +14.3%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2025 figures (about 10 months old). Earnings retained since then (£0.0883 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.74/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Revenue growth 1 year
+3.5%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+3.0%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+5.0%
Start year 2020 (pandemic). Over 10 years: +4.5% a year
Revenue growth 40 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+14.1%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+7.4%
Earnings growth per share plus dividend.
Earnings per share, growth per year+5.7%
Dividend (yield on the price)1.7%
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.5% → 6%
⚠ Revenue per share shrinking 3.0%/yr over ~10Y (margin trend unclear) ⓘStructural-decline marker: revenue PER SHARE has fallen over the last decade (robust median trend, not a single year). Backtested across 2005 to 2017, such businesses trailed the market by about 2.5 percentage points per year. Display only: it does not change the fair value or the quality score.
Growth Forecast
Little optimism in the price
The price assumes less growth than the company has delivered so far and less than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
−9.6%
The company could shrink this much every year for the next five years and today's price would still be justified.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+3.1%
Yearly sales growth analysts expect, extended to five years.
After inflation (UK: IMF forecast 2.3% a year to 2030, 3.3% from 2016 to 2025) that is about −11.6% a year for the price and +0.7% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (63 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Negative
Recent news coverage is more negative than average.
AI conclusion: Serco benefits from long contract visibility in government services with defence work supporting earnings, yet thin signals of a durable moat and persistently low margins constrain overall quality.
Main risk: Shifts in public spending priorities would hit demand for its government service contracts and reduce earnings visibility.
Serco keeps executing its share buyback programme with fresh purchases in mid-October while defence work drives much of the earnings. The business model delivers long contract visibility in government services yet remains exposed to shifts in public spending priorities. Does the market see the steady capital returns reinforcing the undervaluation our models identify or does it weigh the procurement risks more heavily?
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Specialty Business Services · 229 stocks
Beats the industry median on 6/13 measures
A mixed picture versus its industry peers.
Valuation
Quality Score71 · Top 25%
Fair Value upside+14.3% · Above median
Profitability
Return on equity (12 months)17.6% · Top 25%
Return on assets5.2% · Above median
Net margin (12 months)3.1% · Below median
Operating margin (12 months)5.1% · Below median
Growth and dividend
Revenue growth (quarter YoY)3.7% · Below median
Dividend yield (12 months)1.7% · Below median
Balance sheet
Debt / equity0.46× · Above median
Valuation Multiplesvs Specialty Business Services median · lower = cheaper
P/E (12 months)18.7× · Pricier than median
P/B3.25× · book value is mostly goodwill ⓘGoodwill and other intangible assets are larger than the equity. The book value mainly reflects prices paid for past acquisitions, so we do not rank this P/B against the peer group.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Serco Group Fair Value". https://www.fairvalue-calculator.com/stock/SRP
Frequently asked questions
Is Serco Group (SRP) overvalued or undervalued?
As of Nov 9, 2026, our model estimates a fair value of £3.21 versus a price of £2.81, about +14% upside (undervalued).
What is the fair value of SRP?
Our model-based fair value for Serco Group is £3.21 (as of Nov 9, 2026), built from audited fundamentals. The current price: £2.81.
What is the quality score of SRP?
Serco Group has a Quality Score of 71/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Serco Group (SRP)?
Our model-based price target is the fair value of £3.21 (as of Nov 9, 2026) from 24 valuation models. Cautious scenario £2.38, optimistic scenario £4.39. It is a calculation from audited fundamentals, not an analyst target.
What is the Serco Group stock forecast for 2026?
Our models put fair value at £3.21, about +14% upside versus a price of £2.81 (undervalued). Cautious scenario £2.38, optimistic scenario £4.39. The calculation is refreshed regularly with new filings.
What is the revenue of Serco Group (SRP)?
Serco Group reported trailing-twelve-month revenue of about £5.0B (latest available figure, as of Nov 9, 2026).
Does Serco Group pay a dividend?
Serco Group currently shows a dividend yield of 1.67% relative to its recent price (as of Nov 9, 2026).
How much is the dividend of Serco Group (SRP) and when is the ex-dividend date?
Serco Group pays a dividend of £0.047 per share a year, a dividend yield of 1.7%. The last ex-dividend date was Aug 27, 2026. A dividend has been paid every year since 2020. The payout ratio is 25.9% of earnings (on adjusted earnings, reported 31.3%). Free cash flow covers the dividend 8.97 times. Our assessment: Well covered. A low payout and the dividend is fully funded by free cash flow, a comfortable, sustainable dividend.
What growth is priced into Serco Group (SRP)?
For today's price to be fair in a discounted-cash-flow model, Serco Group would have to grow free cash flow by -9.6 % per year for five years (discount rate 9.1 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +5.0 % per year. As of Nov 9, 2026.
What discount rate (WACC) does the fair value of SRP use?
Our models discount Serco Group at 9.1 %: a base by market capitalisation (mid), damped by beta 0.52, country premium for United Kingdom. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Serco Group that is -9.6 % per year for five years, then slowing evenly to 2 % by year ten, using the same discount rate (9.1 %) and the same formula as our fair value.
How much growth has Serco Group (SRP) delivered so far?
Over the past 5 years revenue at Serco Group grew +5.0 % a year. The price currently implies free-cash-flow growth of -9.6 % per year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Serco Group (SRP) growing?
The median revenue growth in the sector is +7.8 % a year. That is the yardstick for the growth priced into Serco Group (-9.6 % per year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Serco Group (SRP)?
The free-cash-flow yield on the price is 14.30 %: that much free cash flow Serco Group produces per unit of market value. When it exceeds the discount rate of our models (9.1 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Serco Group (SRP)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Serco Group it is £3.21 per share (as of Nov 9, 2026), against a price of £2.81. It is the blended result of 24 valuation models in 7 families (DCF Models, Earnings-Based, Dividend Discount, Multiples, Growth DCF, Economic Profit, Growth Earnings).
Is Serco Group stock overvalued or undervalued in 2026?
As of Nov 9, 2026, SRP trades below its calculated fair value: price £2.81, fair value £3.21, a gap of about +14% (undervalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of SRP?
No. The price is what the market pays today (£2.81); the fair value is what the company's own numbers justify (£3.21). For Serco Group the two are £0.4020 per share apart. That gap is exactly why we show both numbers side by side.
How much is Serco Group worth?
The market values Serco Group at about £2.8B (market capitalisation, as of Nov 9, 2026). Per share that is £2.81; our models calculate a fair value of £3.21 per share.
What do the bullish and bearish scenarios say about SRP?
Our models span a range for Serco Group: cautious scenario £2.38, base £3.21, optimistic £4.39 per share (as of Nov 9, 2026, price £2.81). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of SRP?
Serco Group trades at a price-to-earnings ratio of 18.7 (as of Nov 9, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of £3.21 is built from several models across several years. Excluding one-off items of fiscal year 2025 it is 16.6 (reported for FY2025: 20.1). Median P/E at fiscal year-end, 8 fiscal years (2018 to 2025), reported earnings, FY2025 ex one-offs: 14.1. Other multiples: P/B 3.3, P/S 0.6, EV/EBITDA 11.3.
How solid is the balance sheet of Serco Group (SRP)?
Balance-sheet figures for Serco Group (as of Nov 9, 2026): return on equity 17.6%, debt of 0.46 per unit of equity. They feed the Quality Score of 71/100, which measures business quality independently of the share price.
How far is SRP from its 52-week high?
Serco Group trades at £2.81, about 12% below its 52-week high of £3.20 and 29% above the low of £2.18 (as of Nov 6, 2026). Distance from the high says nothing about value: that is what the fair value of £3.21 is for.
Which stocks are comparable to Serco Group?
From the same area (Industrials) we also value Cintas Corporation, Thomson Reuters Corporation, Copart, Inc, Global Payments Inc, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Serco Group stock attractive at the current price?
The data as of Nov 9, 2026: price £2.81, calculated fair value £3.21 (+14%), Quality Score 71/100, from 24 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of SRP calculated?
We run Serco Group through 24 models from 7 families: DCF Models, Earnings-Based, Dividend Discount, Multiples, Growth DCF, Economic Profit, Growth Earnings. Every model gets the same audited fundamentals; the fair value of £3.21 builds on their evidence-weighted average, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 13.3% above its aggregate fair value. Serco Group currently trades 13% below its own fair value, and the market average says nothing about that. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Serco Group (SRP)?
The closing price on Nov 6, 2026 was £2.81. Our model-based fair value is £3.21, about +14% upside (undervalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Serco Group right now?
A fairly wide model range (£2.38 to £4.39) leaves room in how you read the outcome. The price sits in the lower half of our model range, the side with the larger margin of safety. The data supports the verdict: every model runs on fully documented inputs.
Key figures of Serco Group
How large is the market capitalisation of Serco Group (SRP)?
The market capitalisation of Serco Group is £2.8B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Serco Group (SRP)?
The price-to-sales ratio of Serco Group is 0.57 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Serco Group (SRP)?
Earnings per share at Serco Group are £0.1500 (price ÷ EPS = P/E 18.7). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Serco Group (SRP)?
The dividend yield of Serco Group is 1.7% (payout 25.9%, on adjusted earnings, reported 31.3%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Serco Group (SRP)?
The net margin of Serco Group is 3.1% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Serco Group (SRP)?
The return on equity (ROE) of Serco Group is 17.6% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Serco Group (SRP)?
On an EBIT basis the return on assets of Serco Group is 8.0% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Serco Group (SRP)?
The operating margin of Serco Group is 5.1% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Serco Group (SRP)?
Revenue at Serco Group is growing +3.7% versus a year earlier (3y avg +3.0%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Serco Group (SRP)?
Earnings per share at Serco Group are growing +10.5% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Serco Group (SRP) carry?
The net debt of Serco Group is £710M (fiscal year 2025, ≈ 1.8 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 9, 2026