CWST
Casella Waste Systems, Inc.
$89.39
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 26.3% above fair value
You pay
$89.39
Bear
$38.10
Fair
$70.75
Bull
$106.62
Bear
$38.10
-57.4%
9% stage 1 growth, 11% discount
Fair
$70.75
-20.8%
14% stage 1 growth, 11% discount
Bull
$106.62
+19.3%
19% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
43.3x
Market is pricing in (growth)
19.3%
vs 14.4% 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 $113.00 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $70.75 per share.
Warnings
Wall Street's average price target is $113.00 (from 19 analysts). Our estimate is 50% 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