GIII
G-III Apparel Group, Ltd.
$35.42
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 60.4% below fair value
You pay
$35.42
Bear
$72.06
Fair
$89.38
Bull
$105.33
Bear
$72.06
+103.4%
5% stage 1 growth, 11% discount
Fair
$89.38
+152.3%
8% stage 1 growth, 11% discount
Bull
$105.33
+197.4%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
5.7x
Market is pricing in (growth)
-8.9%
vs 7.5% 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 $39.33 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $89.38 per share.
Warnings
Stock-based employee pay equals 43% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $39.33 (from 29 analysts). Our estimate is 170% 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