MEC
Mayville Engineering Company, Inc.
$30.29
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 23.2% above fair value
You pay
$30.29
Bear
$18.63
Fair
$24.59
Bull
$30.27
Bear
$18.63
-38.5%
5% stage 1 growth, 11% discount
Fair
$24.59
-18.8%
9% stage 1 growth, 11% discount
Bull
$30.27
-0.1%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
26.3x
Market is pricing in (growth)
12.7%
vs 8.8% 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 $33.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.59 per share.
Warnings
Wall Street's average price target is $33.00 (from 7 analysts). Our estimate is 32% 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