CRAI
CRA International, Inc.
$169.77
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 680.1% above fair value
You pay
$169.77
Bear
$14.30
Fair
$21.76
Bull
$28.59
Bear
$14.30
-91.6%
4% stage 1 growth, 11% discount
Fair
$21.76
-87.2%
7% stage 1 growth, 11% discount
Bull
$28.59
-83.2%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
85.2x
Market is pricing in (growth)
28.3%
vs 7.3% base
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $21.76 per share.
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