BHE
Benchmark Electronics, Inc.
$77.52
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 94.1% above fair value
You pay
$77.52
Bear
$33.72
Fair
$39.93
Bull
$45.31
Bear
$33.72
-56.5%
3% stage 1 growth, 11% discount
Fair
$39.93
-48.5%
5% stage 1 growth, 11% discount
Bull
$45.31
-41.5%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
39.5x
Market is pricing in (growth)
18.1%
vs 5.3% 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 $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