MEC
Mayville Engineering Company, Inc.
$25.45
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 5.3% above fair value
You pay
$25.45
Bear
$18.31
Fair
$24.16
Bull
$29.73
Bear
$18.31
-28.1%
5% stage 1 growth, 11% discount
Fair
$24.16
-5.1%
9% stage 1 growth, 11% discount
Bull
$29.73
+16.8%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
22.3x
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 $31.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.16 per share.
Warnings
Wall Street's average price target is $31.00 (from 7 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