ESE
ESCO Technologies Inc.
$329.12
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 78.1% above fair value
You pay
$329.12
Bear
$142.47
Fair
$184.79
Bull
$224.69
Bear
$142.47
-56.7%
5% stage 1 growth, 11% discount
Fair
$184.79
-43.9%
8% stage 1 growth, 11% discount
Bull
$224.69
-31.7%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
38%
Implied Market Multiple
47.6x
Market is pricing in (growth)
20.5%
vs 8.4% 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 $350.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $184.79 per share.
Warnings
Wall Street's average price target is $350.00 (from 15 analysts). Our estimate is 63% 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