NSSC
Napco Security Technologies, Inc.
$35.91
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 2.2% below fair value
You pay
$35.91
Bear
$27.77
Fair
$36.71
Bull
$45.65
Bear
$27.77
-22.7%
7% stage 1 growth, 12% discount
Fair
$36.71
+2.2%
11% stage 1 growth, 12% discount
Bull
$45.65
+27.1%
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
19.7x
Market is pricing in (growth)
10.6%
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 $36.71 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