HGV
Hilton Grand Vacations Inc.
$50.42
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 287.8% above fair value
Bear
$0.00
-100.0%
7% stage 1 growth, 12% discount
Fair
$13.00
-74.2%
11% stage 1 growth, 12% discount
Bull
$0.00
-100.0%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
59.0x
Market is pricing in (growth)
25.6%
vs 11.0% 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 $52.00 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $13.00 per share.
Warnings
Stock-based employee pay equals 79% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $52.00 (from 16 analysts). Our estimate is 100% 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