KE
Kimball Electronics, Inc.
$28.80
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 68.0% above fair value
You pay
$28.80
Bear
$14.45
Fair
$17.15
Bull
$19.50
Bear
$14.45
-49.8%
3% stage 1 growth, 11% discount
Fair
$17.15
-40.5%
5% stage 1 growth, 11% discount
Bull
$19.50
-32.3%
7% stage 1 growth, 11% discount
Adjust Assumptions
5.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
25.2x
Market is pricing in (growth)
12.1%
vs 5.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$26.00
Divergence from AlphaVal
34%
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $17.15 per share.
Warnings
Wall Street's average price target is $26.00 (from 5 analysts). Our estimate is 34% 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