POWL
Powell Industries, Inc.
$234.25
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 35.3% above fair value
You pay
$234.25
Bear
$111.60
Fair
$173.15
Bull
$243.98
Bear
$111.60
-52.4%
10% stage 1 growth, 11% discount
Fair
$173.15
-26.1%
16% stage 1 growth, 11% discount
Bull
$243.98
+4.2%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
44%
Implied Market Multiple
53.3x
Market is pricing in (growth)
22.0%
vs 16.3% 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 $237.67 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $173.15 per share.
Warnings
Wall Street's average price target is $237.67 (from 10 analysts). Our estimate is 34% 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