BHE
Benchmark Electronics, Inc.
$85.12
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 113.2% above fair value
You pay
$85.12
Bear
$33.72
Fair
$39.93
Bull
$45.31
Bear
$33.72
-60.4%
3% stage 1 growth, 11% discount
Fair
$39.93
-53.1%
5% stage 1 growth, 11% discount
Bull
$45.31
-46.8%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
43.3x
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 $86.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $39.93 per share.
Warnings
Stock-based employee pay equals 69% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $86.00 (from 9 analysts). Our estimate is 67% 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