IIIN
Insteel Industries, Inc.
$28.04
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 38.9% above fair value
You pay
$28.04
Bear
$17.31
Fair
$20.18
Bull
$22.71
Bear
$17.31
-38.3%
4% stage 1 growth, 11% discount
Fair
$20.18
-28.0%
6% stage 1 growth, 11% discount
Bull
$22.71
-19.0%
8% stage 1 growth, 11% discount
Adjust Assumptions
5.9%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
22.7x
Market is pricing in (growth)
10.7%
vs 5.9% base
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $20.18 per share.
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