FC
Franklin Covey Co.
$23.67
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 52.6% below fair value
You pay
$23.67
Bear
$42.09
Fair
$49.98
Bull
$56.96
Bear
$42.09
+77.8%
4% stage 1 growth, 11% discount
Fair
$49.98
+111.1%
6% stage 1 growth, 11% discount
Bull
$56.96
+140.7%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
6.4x
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 $25.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $49.98 per share.
Warnings
Stock-based employee pay equals 189% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $25.00 (from 8 analysts). Our estimate is 125% above 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