CRAI
CRA International, Inc.
$200.14
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 457.5% above fair value
You pay
$200.14
Bear
$24.70
Fair
$35.90
Bull
$46.33
Bear
$24.70
-87.7%
5% stage 1 growth, 11% discount
Fair
$35.90
-82.1%
8% stage 1 growth, 11% discount
Bull
$46.33
-76.8%
10% stage 1 growth, 11% discount
Adjust Assumptions
8.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
75.9x
Market is pricing in (growth)
26.8%
vs 8.0% base
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $35.90 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