GHM
Graham Corporation
$94.96
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 513.9% above fair value
You pay
$94.96
Bear
$9.48
Fair
$15.47
Bull
$22.69
Bear
$9.48
-90.0%
11% stage 1 growth, 11% discount
Fair
$15.47
-83.7%
18% stage 1 growth, 11% discount
Bull
$22.69
-76.1%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
266.4x
Summary
Using a two-stage FCF DCF with 18% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $15.47 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