PNTG
The Pennant Group, Inc.
$39.73
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 117.8% above fair value
You pay
$39.73
Bear
$4.64
Fair
$18.24
Bull
$35.08
Bear
$4.64
-88.3%
12% stage 1 growth, 11% discount
Fair
$18.24
-54.1%
19% stage 1 growth, 11% discount
Bull
$35.08
-11.7%
25% stage 1 growth, 11% discount
Adjust Assumptions
19.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
46%
Implied Market Multiple
74.1x
Market is pricing in (growth)
26.4%
vs 19.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$44.50
Divergence from AlphaVal
59%
Summary
Using a two-stage FCF DCF with 19% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $18.24 per share.
Warnings
Stock-based employee pay equals 30% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $44.50 (from 7 analysts). Our estimate is 59% 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