DNOW
Dnow Inc.
$15.57
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 21.7% above fair value
You pay
$15.57
Bear
$8.34
Fair
$12.80
Bull
$17.37
Bear
$8.34
-46.5%
7% stage 1 growth, 11% discount
Fair
$12.80
-17.8%
12% stage 1 growth, 11% discount
Bull
$17.37
+11.6%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
29.1x
Market is pricing in (growth)
14.0%
vs 11.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$19.00
Divergence from AlphaVal
33%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $12.80 per share.
Warnings
Wall Street's average price target is $19.00 (from 18 analysts). Our estimate is 33% 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