MCRI
Monarch Casino & Resort, Inc.
$126.25
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 35.6% above fair value
You pay
$126.25
Bear
$89.17
Fair
$93.13
Bull
$100.24
Bear
$89.17
-29.4%
3% stage 1 growth, 12% discount
Fair
$93.13
-26.2%
4% stage 1 growth, 12% discount
Bull
$100.24
-20.6%
5% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
29%
Implied Market Multiple
17.8x
Market is pricing in (growth)
9.2%
vs 3.6% 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 $120.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $93.13 per share.
Warnings
Wall Street's average price target is $120.00 (from 9 analysts). Our estimate is 28% 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