MLAB
Mesa Laboratories, Inc.
$94.95
Platform & Compounding FCF
65%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 69.5% above fair value
You pay
$94.95
Bear
$43.54
Fair
$56.02
Bull
$66.84
Bear
$43.54
-54.1%
3% stage 1 growth, 11% discount
Fair
$56.02
-41.0%
5% stage 1 growth, 11% discount
Bull
$66.84
-29.6%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
25.5x
Market is pricing in (growth)
12.2%
vs 5.3% 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 $94.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $56.02 per share.
Warnings
Stock-based employee pay equals 266% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $94.00 (from 8 analysts). Our estimate is 51% 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