R
Ryder System, Inc.
$244.00
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 66.0% below fair value
You pay
$244.00
Bear
$519.48
Fair
$717.74
Bull
$905.15
Bear
$519.48
+112.9%
5% stage 1 growth, 11% discount
Fair
$717.74
+194.2%
9% stage 1 growth, 11% discount
Bull
$905.15
+271.0%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
7.9x
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 $247.33 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $717.74 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 $247.33 (from 35 analysts). Our estimate is 272% 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