GNRC
Generac Holdings Inc.
$208.14
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 125.6% above fair value
You pay
$208.14
Bear
$59.54
Fair
$92.26
Bull
$126.18
Bear
$59.54
-71.4%
7% stage 1 growth, 12% discount
Fair
$92.26
-55.7%
12% stage 1 growth, 12% discount
Bull
$126.18
-39.4%
16% stage 1 growth, 12% discount
Adjust Assumptions
12.3%
12.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
46.0x
Market is pricing in (growth)
22.2%
vs 12.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (40 analysts)
$304.20
Divergence from AlphaVal
70%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $92.26 per share.
Warnings
Stock-based employee pay equals 31% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $304.20 (from 40 analysts). Our estimate is 70% 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