R
Ryder System, Inc.
$267.68
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 63.7% below fair value
You pay
$267.68
Bear
$533.46
Fair
$737.07
Bull
$929.52
Bear
$533.46
+99.3%
5% stage 1 growth, 11% discount
Fair
$737.07
+175.4%
9% stage 1 growth, 11% discount
Bull
$929.52
+247.3%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
8.2x
Market is pricing in (growth)
-3.3%
vs 8.5% 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 $292.50 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $737.07 per share.
Warnings
This company spends 17% of revenue on big investments like data centers and infrastructure, mostly for growth. We adjusted the cash flow figure to only subtract the upkeep costs, giving a clearer picture of true profitability.
Wall Street's average price target is $292.50 (from 35 analysts). Our estimate is 217% above 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