KE
Kimball Electronics, Inc.
$24.60
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 63.6% below fair value
You pay
$24.60
Bear
$67.62
Fair
$67.62
Bull
$72.32
Bear
$67.62
+174.9%
3% stage 1 growth, 11% discount
Fair
$67.62
+174.9%
3% stage 1 growth, 11% discount
Bull
$72.32
+194.0%
4% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
4.3x
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 $26.00 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $67.62 per share.
Warnings
Wall Street's average price target is $26.00 (from 5 analysts). Our estimate is 200% above 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