ABM
ABM Industries Inc.
$53.67
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 98.5% above fair value
You pay
$53.67
Bear
$18.30
Fair
$27.04
Bull
$34.78
Bear
$18.30
-65.9%
4% stage 1 growth, 11% discount
Fair
$27.04
-49.6%
6% stage 1 growth, 11% discount
Bull
$34.78
-35.2%
8% stage 1 growth, 11% discount
Adjust Assumptions
6.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
23.9x
Market is pricing in (growth)
11.4%
vs 6.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$51.88
Divergence from AlphaVal
48%
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $27.04 per share.
Warnings
Wall Street's average price target is $51.88 (from 12 analysts). Our estimate is 48% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions