FSS
Federal Signal Corporation
$114.64
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 15.1% above fair value
You pay
$114.64
Bear
$62.46
Fair
$99.62
Bull
$140.04
Bear
$62.46
-45.5%
8% stage 1 growth, 11% discount
Fair
$99.62
-13.1%
14% stage 1 growth, 11% discount
Bull
$140.04
+22.2%
18% stage 1 growth, 11% discount
Adjust Assumptions
14.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
33.2x
Market is pricing in (growth)
15.8%
vs 14.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$140.00
Divergence from AlphaVal
29%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $99.62 per share.
Warnings
Wall Street's average price target is $140.00 (from 11 analysts). Our estimate is 29% 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