CTAS
Cintas Corporation
$204.01
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 56.2% above fair value
You pay
$204.01
Bear
$95.96
Fair
$130.60
Bull
$164.27
Bear
$95.96
-53.0%
6% stage 1 growth, 11% discount
Fair
$130.60
-36.0%
10% stage 1 growth, 11% discount
Bull
$164.27
-19.5%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
47.1x
Market is pricing in (growth)
20.4%
vs 9.6% 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 $231.25 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $130.60 per share.
Warnings
Wall Street's average price target is $231.25 (from 30 analysts). Our estimate is 62% 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