FC
Franklin Covey Co.
$20.51
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 50.1% below fair value
You pay
$20.51
Bear
$41.09
Fair
$41.09
Bull
$43.73
Bear
$41.09
+100.3%
3% stage 1 growth, 11% discount
Fair
$41.09
+100.3%
3% stage 1 growth, 11% discount
Bull
$43.73
+113.2%
4% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
5.5x
Market is pricing in (growth)
-9.4%
vs 3.0% 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 $25.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $41.09 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 80% 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