NEOG
Neogen Corporation
$12.19
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 1281.8% above fair value
You pay
$12.19
Bear
$0.75
Fair
$0.88
Bull
$1.17
Bear
$0.75
-93.9%
3% stage 1 growth, 12% discount
Fair
$0.88
-92.8%
4% stage 1 growth, 12% discount
Bull
$1.17
-90.4%
5% stage 1 growth, 12% discount
Adjust Assumptions
3.5%
12.0%
3.0%
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
29%
Implied Market Multiple
48.5x
Market is pricing in (growth)
22.9%
vs 3.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$13.50
Divergence from AlphaVal
93%
Summary
Using a two-stage FCF DCF with 4% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $0.88 per share.
Warnings
Wall Street's average price target is $13.50 (from 11 analysts). Our estimate is 93% 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