PNTG
The Pennant Group, Inc.
$33.92
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 40.0% above fair value
You pay
$33.92
Bear
$6.95
Fair
$24.23
Bull
$45.61
Bear
$6.95
-79.5%
12% stage 1 growth, 11% discount
Fair
$24.23
-28.6%
19% stage 1 growth, 11% discount
Bull
$45.61
+34.5%
25% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
46%
Implied Market Multiple
61.4x
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 $39.33 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.23 per share.
Warnings
Wall Street's average price target is $39.33 (from 7 analysts). Our estimate is 48% 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