POOL
Pool Corporation
$219.47
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 51.9% above fair value
You pay
$219.47
Bear
$105.78
Fair
$144.47
Bull
$179.88
Bear
$105.78
-51.8%
4% stage 1 growth, 11% discount
Fair
$144.47
-34.2%
7% stage 1 growth, 11% discount
Bull
$179.88
-18.0%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
32.2x
Market is pricing in (growth)
15.4%
vs 7.3% base
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 $270.17 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $144.47 per share.
Warnings
Wall Street's average price target is $270.17 (from 21 analysts). Our estimate is 62% 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