GHC
Graham Holdings Company
$1,213.48
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 33.5% below fair value
You pay
$1,213.48
Bear
$1,282.15
Fair
$1,824.56
Bull
$2,373.75
Bear
$1,282.15
+5.7%
7% stage 1 growth, 11% discount
Fair
$1,824.56
+50.4%
11% stage 1 growth, 11% discount
Bull
$2,373.75
+95.6%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.2%
11.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
16.1x
Market is pricing in (growth)
6.0%
vs 11.2% base
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $1824.56 per share.
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