HEI-A
HEICO Corporation
$245.97
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 13.7% below fair value
You pay
$245.97
Bear
$151.79
Fair
$285.03
Bull
$449.98
Bear
$151.79
-38.3%
12% stage 1 growth, 11% discount
Fair
$285.03
+15.9%
19% stage 1 growth, 11% discount
Bull
$449.98
+82.9%
25% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
46%
Implied Market Multiple
43.4x
Market is pricing in (growth)
19.3%
vs 19.4% 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 $396.67 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $285.03 per share.
Warnings
Wall Street's average price target is $396.67 (from 20 analysts). Our estimate is 38% 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