GNRC
Generac Holdings Inc.
$278.62
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 103.6% above fair value
You pay
$278.62
Bear
$86.00
Fair
$136.84
Bull
$189.53
Bear
$86.00
-69.1%
7% stage 1 growth, 12% discount
Fair
$136.84
-50.9%
12% stage 1 growth, 12% discount
Bull
$189.53
-32.0%
16% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
75.4x
Market is pricing in (growth)
28.9%
vs 12.3% 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 $291.50 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $136.84 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 $291.50 (from 39 analysts). Our estimate is 76% 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