RDVT
Red Violet, Inc.
$60.86
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 19.0% below fair value
You pay
$60.86
Bear
$41.72
Fair
$75.18
Bull
$118.05
Bear
$41.72
-31.4%
13% stage 1 growth, 12% discount
Fair
$75.18
+23.5%
21% stage 1 growth, 12% discount
Bull
$118.05
+94.0%
27% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (21% base case)
Terminal Value % of EV
43%
Implied Market Multiple
34.2x
Market is pricing in (growth)
18.1%
vs 21.1% base
Summary
Using a two-stage FCF DCF with 21% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $75.18 per share.
Warnings
Stock-based employee pay equals 49% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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