CDW
CDW Corporation
$110.82
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 7.6% above fair value
You pay
$110.82
Bear
$79.54
Fair
$103.02
Bull
$123.56
Bear
$79.54
-28.2%
3% stage 1 growth, 11% discount
Fair
$103.02
-7.0%
6% stage 1 growth, 11% discount
Bull
$123.56
+11.5%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
18.3x
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 $148.20 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $103.02 per share.
Warnings
Wall Street's average price target is $148.20 (from 18 analysts). Our estimate is 41% 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