ACA
Arcosa, Inc.
$144.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 163.2% above fair value
You pay
$144.44
Bear
$33.50
Fair
$54.87
Bull
$74.93
Bear
$33.50
-76.8%
5% stage 1 growth, 11% discount
Fair
$54.87
-62.0%
8% stage 1 growth, 11% discount
Bull
$74.93
-48.1%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
54.0x
Market is pricing in (growth)
22.2%
vs 8.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $140.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $54.87 per share.
Warnings
Wall Street's average price target is $140.00 (from 8 analysts). Our estimate is 76% 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