NSSC
Napco Security Technologies, Inc.
$37.01
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 0.7% above fair value
You pay
$37.01
Bear
$27.81
Fair
$36.75
Bull
$45.70
Bear
$27.81
-24.9%
7% stage 1 growth, 12% discount
Fair
$36.75
-0.7%
11% stage 1 growth, 12% discount
Bull
$45.70
+23.5%
14% stage 1 growth, 12% discount
Adjust Assumptions
10.9%
12.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
20.3x
Market is pricing in (growth)
11.1%
vs 10.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$52.00
Divergence from AlphaVal
29%
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $36.75 per share.
Warnings
Wall Street's average price target is $52.00 (from 11 analysts). Our estimate is 29% 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