AQUA
Evoqua Water Technologies Corp.
$49.88
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 521.4% above fair value
You pay
$49.88
Bear
$5.34
Fair
$8.03
Bull
$10.48
Bear
$5.34
-89.3%
4% stage 1 growth, 12% discount
Fair
$8.03
-83.9%
7% stage 1 growth, 12% discount
Bull
$10.48
-79.0%
9% stage 1 growth, 12% discount
Adjust Assumptions
7.3%
12.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
32%
Implied Market Multiple
60.7x
Market is pricing in (growth)
25.9%
vs 7.3% base
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $8.03 per share.
Warnings
Stock-based employee pay equals 31% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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