HEI
HEICO Corporation
$301.04
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 21.3% above fair value
You pay
$301.04
Bear
$145.03
Fair
$248.18
Bull
$366.84
Bear
$145.03
-51.8%
10% stage 1 growth, 11% discount
Fair
$248.18
-17.6%
16% stage 1 growth, 11% discount
Bull
$366.84
+21.9%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
44%
Implied Market Multiple
52.5x
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 $375.29 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $248.18 per share.
Warnings
Wall Street's average price target is $375.29 (from 34 analysts). Our estimate is 48% 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