ALG
Alamo Group Inc.
$148.73
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 30.8% below fair value
You pay
$148.73
Bear
$178.29
Fair
$214.98
Bull
$247.94
Bear
$178.29
+19.9%
4% stage 1 growth, 11% discount
Fair
$214.98
+44.5%
7% stage 1 growth, 11% discount
Bull
$247.94
+66.7%
9% stage 1 growth, 11% discount
Adjust Assumptions
6.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
11.4x
Market is pricing in (growth)
1.4%
vs 6.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$188.00
Divergence from AlphaVal
14%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $214.98 per share.
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