ESAB
ESAB Corporation
$89.18
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 49.0% above fair value
You pay
$89.18
Bear
$41.21
Fair
$59.86
Bull
$77.17
Bear
$41.21
-53.8%
5% stage 1 growth, 11% discount
Fair
$59.86
-32.9%
8% stage 1 growth, 11% discount
Bull
$77.17
-13.5%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
33.3x
Market is pricing in (growth)
15.8%
vs 7.8% 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 $139.50 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $59.86 per share.
Warnings
Wall Street's average price target is $139.50 (from 10 analysts). Our estimate is 71% 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