GHC
Graham Holdings Company
$1,127.68
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 37.0% below fair value
You pay
$1,127.68
Bear
$1,257.92
Fair
$1,790.08
Bull
$2,328.89
Bear
$1,257.92
+11.5%
7% stage 1 growth, 11% discount
Fair
$1,790.08
+58.7%
11% stage 1 growth, 11% discount
Bull
$2,328.89
+106.5%
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
15.3x
Market is pricing in (growth)
5.3%
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 $1790.08 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