LXU
LSB Industries, Inc.
$11.34
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 42.9% below fair value
You pay
$11.34
Bear
$12.62
Fair
$19.87
Bull
$27.34
Bear
$12.62
+11.3%
7% stage 1 growth, 11% discount
Fair
$19.87
+75.2%
12% stage 1 growth, 11% discount
Bull
$27.34
+141.1%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
15.5x
Market is pricing in (growth)
5.5%
vs 11.9% 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 $15.50 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $19.87 per share.
Warnings
This company spends 13% of revenue on big investments like data centers and infrastructure, mostly for growth. We adjusted the cash flow figure to only subtract the upkeep costs, giving a clearer picture of true profitability.
Wall Street's average price target is $15.50 (from 11 analysts). Our estimate is 35% 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