BKI
Black Knight, Inc.
$75.78
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 185.3% above fair value
You pay
$75.78
Bear
$16.76
Fair
$26.56
Bull
$35.84
Bear
$16.76
-77.9%
5% stage 1 growth, 11% discount
Fair
$26.56
-65.0%
9% stage 1 growth, 11% discount
Bull
$35.84
-52.7%
11% stage 1 growth, 11% discount
Adjust Assumptions
8.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
41.5x
Market is pricing in (growth)
18.7%
vs 8.6% base
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $26.56 per share.
Warnings
Stock-based employee pay equals 38% 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